GLOBAL SUZUKI

Message from the President

Aiming to be an infrastructure company closely connected with people’s lives, we will take our challenge one step further and grow as a company and as individuals

Toshihiro Suzuki
Representative Director and President

Suzuki aims to become an infrastructure company closely connected with people’s lives

Suzuki started its first business when the Company’s founder Michio Suzuki made a loom in order to make his mother’s work easier and encouraged other people in the neighborhood to use the machine as well. Since then, Suzuki has expanded its business to motorcycles, automobiles, and marine products.
Currently, the automobile industry finds itself in a period of a once-in-a-century great transformation, with increasing demands for eco-friendly product development, including measures to mitigate global warming. Suzuki has strengths in mini vehicles in Japan, and compact cars globally. The Company always focuses on the basis of manufacturing products with minimal resources required, as reflected in its principle of “Sho-Sho-Kei-Tan-Bi (Smaller, Fewer, Lighter, Shorter, Beauty).” I believe this approach has a strong affinity with product development reducing environmental impact, as required in a carbon-neutral society. In the future, we expect electrified forms of mobility to play an increasingly pivotal role in the approach.
We take pride in having provided modes of transportation that serve as social infrastructure, thereby offering mobility that supports people’s daily lives. Looking ahead, we believe that the scope of social infrastructure will continue to expand and incorporate automobiles as a foundation of people’s lives. Moreover, unlike the conventional use of ICE vehicles, we expect that through electrification, automobiles themselves will become a part of the social infrastructure, though the extent might be limited. While monitoring these types of changes, we believe that Suzuki’s role is to provide infrastructure closely connected with people’s lives by perfecting small mobility, a field in which we excel.
Moreover, in India, where there are said to be 300 million cows, we are developing a biogas business utilizing cow dung. If left untreated, this cow dung may become a contributing factor to global warming. By refining biogas fuel from cow dung and producing organic fertilizer from the residue, this business aims to raise income levels in rural areas and contribute to India’s development. Of India’s total population of 1.4 billion, the primary customer base we serve is still about 400 million people with enough income to afford a car. Recently, internal discussions at Suzuki have increasingly been focused on how we will monitor, understand, and build relationships with the income segment of roughly 1.0 billion people, primarily agricultural workers, who do not yet earn enough to afford a car or motorcycle. India is a vast country with diverse ethnicities. It is crucial for us to penetrate into the country thoroughly, closely observe people’s daily lives, and think more deeply about their needs. We are exploring how Suzuki can help solve people’s everyday problems and raise the standard of living for individuals. To do so, we believe the answers lie in the “Genba, Genbutsu, Genjitsu (Actual place, Actual thing, Actual situation).” Since Suzuki was founded as a startup around 100 years ago, we have survived and grown because we have worked tirelessly to solve problems from our customers’ perspective. This is something we must always remember.

Human capital enhancement
(personnel system reforms, diversity)

In order to strengthen our competitiveness and change as a company, we have been working on the three pillars of structural reform, risk minimization, and planting seeds for the future as substantial corporate enhancement measures based on Japan’s Corporate Governance Code. Moreover, we announced our Growth Strategy for FY2030 in January 2023. Along with this announcement, since 2022, we have changed the format of annual Shunto labor-management wage negotiations. Although we grappled with the issue of whether it was appropriate for Suzuki alone to raise its wages, given factors such as the regional characteristics of the Hamamatsu area, we have implemented personnel system reforms for the first time in about 30 years.
In terms of human capital development, which we have previously left it up to frontline workers under the commonlyused term “OJT (On the Job Training),” we will create systematic learning opportunities that balance OJT with off-JT methods, such as classroom lectures and online training. How do we develop individual capabilities, link them to technology and product development, and deliver valuable products to our customers? These questions are the foundation of securing earning power and will lead to higher wages. We will ensure that each and every employee embraces this mindset. The Company values its people and considers how to leverage their strengths to encourage corporate growth.
I believe that internal personnel transfers, similar to job changes, offer opportunities to experience new workplaces and roles. However, information such as “What kind of work does this department do?” and “What skills are needed for this department’s work?” has not been clearly defined within the organization. Additionally, the skills, capabilities, and aptitude of individual employees have not been clearly identified within the Company, resulting in limited opportunities for personnel exchange. We need to better define the types of human talent we seek across the Company, identify individuals willing to voluntarily take on these roles, and assign them to appropriate work positions. If we can achieve this, employees will be more motivated in their work, and the Company will become more energized. This is what I aim to accomplish within the personnel system.

The ability to observe and evaluate people is an essential management skill. A key factor in evaluating employees is to closely observe their actions. Is each employee working with a customer-focused mindset, or are they working while preoccupied with their supervisors? This difference can have a huge impacts on outcomes. If employees are mindful of customers, constructive discussions can take place even when opinions differ within the Company, and it is less likely for misconduct or other problems to occur.
A perfect personnel system cannot be created all at once; therefore, I intend to steadily gather input from various people, make continuous improvements, and work together to develop the system. Suzuki cannot survive without its customers. That is why we must always remember who the main character in this story is. We need to consider what the customer seeks and respond to those needs.
Frankly, we still face many challenges in terms of diversity. Suzuki’s ratio of women in management is low compared to other companies, and we have not yet created an environment that facilitates women’s success in the workplace. Moving forward, while considering life events such as childbirth and child raising, we will work toward the goal of achieving an equal ratio between men and women in promotion to management roles and recruitment. Additionally, we are conducting activities to encourage closer communication and mutual support among employees globally, especially between Japan and India, in order to increase diversity while unifying our efforts. While gaining the cooperation of local communities, we will create an environment in which employees can enjoy the lifestyle they want, regardless of whether they are in Japan or India. Furthermore, in the future, we envision that global talent may eventually take on officer roles at Suzuki head office. Suzuki’s Mission Statement and Philosophy of Conduct, developed over more than 100 years of history, are deeply ingrained in our actions. By ensuring that employees of Group companies, including those overseas, fully understand these principles, Suzuki’s diverse talent can continue growing and progressing toward the same goals. We believe this approach is crucial.

Technology strategy and new mid-term management plan for achieving the growth strategy

The past 40 years since we entered India have been a history of both growth and setbacks. Aiming to achieve an annual production capacity of 4 million vehicles by 2030, we plan to construct and start operating plants with an annual production capacity of 250,000 units. This plan presents an extremely challenging task. While we can purchase facilities and plants with sufficient funds, human capital development takes time. Therefore, the key is attracting talented people and how to make them understand Suzuki’s culture and principles. Moreover, we must do more than just construct plants on land we own. We need to solve various issues, such as logistics issues accompanying growth, developing the surrounding environment, and complying with greening ratio requirements. We should take the production capacity of 4 million units as a turning point and must transform our operations to optimize our organization, facilities and work processes. While solidifying our foundation in India, we will also explore the application of similar approaches in Africa going forward.
In July, we held a briefing on our technology strategy. Up until now, we have carried out technological development somewhat intuitively. However, based on our commitment to the ideals of lighter, shorter, and beautiful products and the idea that smaller vehicles have less impact on the environment, we have shifted the core of our technological strategy to once again focus on energy-minimizing technology, which reduces CO2 emissions from manufacturing to recycling. We believe that we should adopt a policy of using resources effectively and promoting carbon neutrality in line with the local community. Since price and user-friendliness are important for mobility, which is closely connected to people’s lives, we strive to develop practical and valuable technologies. We will pursue reasonably priced, lifestyle-oriented technologies that meet the needs of the times, so that people will say, “This is useful” or “This is what I’ve been waiting for.”
We are currently formulating our new mid-term management plan, with Executive General Managers gathering at lunchtime every week to discuss strategies for all business fields, including technology strategy, until participants build a consensus. We are having more thorough discussions than in the previous mid-term management plan. Rather than creating a plan just for appearances, we will develop a highly executable one that ensures the passion and dedication of all Team Suzuki members—across product development, including technology, production, and sales—along with attractive product features, are delivered to our customers. We are determined to steadily achieve our growth strategy.

Strengthening governance and compliance

We apologize for the concern and inconvenience caused to all stakeholders regarding the irregularities found in our application for type designation which we made public in June of this year. Since the occurrence of misconduct regarding fuel efficiency and final inspections in the past, we have been working to prevent such incidents and to immediately share information to correct them when they are found. As part of our efforts to foster an open corporate culture where opinions can be freely expressed regardless of position or seniority, I visit every workplace once a year to speak directly with employees. By asking employees to open up about things that may be difficult to say to their immediate superiors, we are working to improve communication throughout the Company. We also conduct the Remember 5.18 activities every year to keep our employees vigilant and prevent similar mistakes. All employees participate in reflecting on what actions may constitute misconduct in our daily operations. It is essential to address problems while they are still small. We take a firm stance against all forms of wrongdoing, no matter what the reason.

If the development schedule is delayed, we will clearly identify what can and cannot be accomplished, rather than unreasonably adhering to the original timeline. We will reassess the situation, including making schedule changes if necessary. It is vital that we discuss problems that could lead to misconduct and ensure that the same misconduct is never repeated.
Furthermore, we are addressing the increase in work volume by discontinuing unnecessary tasks and focusing on improving efficiency and productivity while harnessing digital technologies and other resources. By doing so, we have secured the man-hours needed for truly essential tasks, such as legal compliance. Additionally, it is crucial to ensure that products can be sold without having to increase product types and specifications any more than necessary. This can be achieved by properly conveying Suzuki’s product development philosophy direction and characteristics, as well as the value of its products, to customers. We also believe that increasing the Company’s earning capacity while removing inefficiencies, along with creating an environment in which each employee can work with strong motivation, is another key aspect of strengthening governance and compliance.

Taking on challenges as President

Since a company consists of individuals, we aim to create a corporate environment where employees can thrive, feel excited about their work, and earn a good living. To this end, we must thoroughly adhere to our Mission Statement and Philosophy of Conduct. We think it is particularly important to provide valuable products that are closely connected to people’s lives, which is summed up in our Mission Statement’s philosophy of “focusing on the customer.” To this end, we must emphasize “Sho-Sho-Kei-Tan-Bi” and “actual place, actual thing, actual situation” and take advantage of the agility of “entrepreneurial spirit” to gain a firm grasp of customer needs and frontline conditions and apply this knowledge to product development. Never forgetting this startup mentality, we must continue to take on new challenges and learn from our mistakes without fear of failure. This will lead to the growth of both individuals and the Company.
We will strive to foster an open corporate culture, listen to the opinions of our employees, and create an environment where each and every employee can work with a sense of fulfillment.

REPORT INDEX

ESG INDEX