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Suzuki Motorcycle bucks the trend, logs 16% growth

Suzuki posted a growth of 16% with a market share jump of 80-90 basis points.

Updated: Aug 26, 2019, 06.15 AM IST
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Suzuki admitted that its sales too have got affected, and it will now grow by 10% in FY20 against its earlier plan of over 30%.
Suzuki Motorcycle, the two-wheeler arm of Suzuki Motor Corporation, has posted a strong double digit growth on the back of new premium scooters, bucking the trend of a sustained slide in the Indian two-wheeler market this fiscal year.

While the forecast is that of a drop in growth in the run-up to the implementation of BS VI emission norms in April 2020, Suzuki Motorcycle is confident of using its full capacity at the existing plant in two years and is also going ahead with its plans of scouting for a fresh land parcel for the new factory.

The decision to go ahead with the new plant comes at a time when automakers are shutting their plants due to falling demand. But Suzuki is looking at a sales target of 1 million units in the domestic market by the end of FY21, Koichiro Hirao, president of Suzuki Motorcycles India, told ET.

“Yes there’s a slowdown, but we know it is temporary. The market will bounce back in the coming year and Suzuki would like to continue to play a bigger role in India, which is the largest market in the world. The average age of twowheeler buyers is 27 and they will continue to drive growth in the future,” he said.

The two-wheeler market may have declined by 12% from April to July of FY20, but Suzuki posted a growth of 16% with a market share jump of 80-90 basis points. In FY19, Suzuki Motorcycle grew its domestic sales by 33%, ending the year with a market share of 3%.

Much like the market, Suzuki admitted that its sales too have got affected, and it will now grow by 10% in FY20 against its earlier plan of over 30%, but the need for the second plant is still there. Earlier, there was a sense of urgency to put up the second plant, but a softening demand has given some time to the company to finalise the location of its second plant, said Hirao.

The company is also looking to increase its exports from India to 100,000 units during the ongoing fiscal. At present, Latin American countries and neighbouring countries such as Bangladesh are the crucial export markets for Suzuki Motorcycles India.

Currently, India accounts for a little less than 30% of Suzuki’s global motorcycles business. Hirao said the share is likely to rise in the future, as India takes more lead responsibility to cater not only to emerging markets like Sri Lanka, Bangladesh or Africa or Latin America, but also developed markets like Japan, Europe and the US.

The company will stick with its decision of staying away from mass market commuter segments in India, and focus on premium scooters above 125 cc and premium bikes above 150 cc. The company has also started work on building its electric portfolio and should have electric vehicles ready by 2021.
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