Suzuki targets 30,000 annual sales in Oz

New product will lift Suzuki Australia's sales base to 30,000 units, says the importer's general manager, Andrew Moore.

But it's unlikely to happen this year, he told motoring.com.au during this week's launch of the Ignis.

The company's fortunes have been mixed in recent years, with national sales hovering around 20,000 units for the past couple of years – below the 10-year average of 21,510.

However, the arrival of the Ignis, plus a new Swift later this year and unrestricted supply of the popular Vitara in 2017 will rebuild sales towards the goal of 30,000.

"With the Ignis light SUV now joining our line-up, we have our strongest ever range of SUVs and passenger vehicles since adding the new Vitara and Baleno in the last 18 months," Moore said.

"With this line-up and new models arriving through the year, we will be in a firm position to achieve our mission statement, to be a light segment leader and small SUV challenger brand, building sales towards 30,000 sales nationally."

Private buyer focus
Like Mazda, Suzuki is very reliant on private buyers rather than fleets for its sales base. While Suzuki tends to fly under the radar, in terms of both its sales volumes and brand awareness, it's a much larger player in the segments it contests than many people realise.

"Our share of the light segment sales to private buyers has grown to over 15 per cent, while our share of small SUV has more than doubled. Over 90 per cent of our sales are to private buyers, ensuring stronger resale values against competitive models, [which are affected] by ex-fleet used vehicles."

Moore admits that Suzuki's sales volumes growth has been dampened by supply constraints for the Vitara, but the SUV's improving supply situation has had some positive impact on repeat business.

"Our limited product line-up has hampered customer retention," he admitted.

"However, we are already seeing strong loyalty, leading to greater customer retention with Vitara.

"Almost half of the Suzuki customers that buy a small SUV, have chosen the Vitara."

Equally important to the brand's sales growth over the next couple of years is the new Ignis, which Suzuki expects will sell at the rate of 400 units a month. That alone would add nearly 5000 units to the total for 2017 – half the growth Suzuki needs to jump from 20,000 to 30,000.

"I have every confidence that we can exceed 400 units a month nationally – and with that full model line-up in coming years, build our volume towards 30,000 units," Moore said.

So there's potential for Suzuki to achieve 30,000 sales in Australia by the end of 2017, including the cars sold in Queensland through a different distributor. Yet Moore sets the brand a fairly conservative figure of 20,000 units once again, for 2017. That may reflect the supply problems the Swift faces in the lead-up to the new model launch later in 2017.

"This year we see the potential, excluding Queensland, to be 20,000 [sales]. Queensland would be anywhere from 3000 to 5000. They control that," he said.

Big business in small cars
Explaining why Suzuki hasn't seen the growth of a Mazda or a Hyundai over the years, Moore pointed to the brand being "small car experts", which limited the number of market segments in which the importer could compete.

"It's the segments," he said. "We're competing in about 30 per cent of the market."

And then there's the brand's focus on private buyers, unlike Hyundai, which sells a lot of vehicles to fleets.

All that said, Suzuki's business in Australia has been solid, running on a leaner basis than in the USA, where Suzuki withdrew from the automotive market four years ago.

The withdrawal from the USA did have some unintended impact on Suzuki's sales in Australia, with Moore citing the Kizashi as one victim. The mid-size sedan had been designed specifically for the US market. During 2010 and 2011 the Kizashi averaged 1500 sales, but in 2016 just 38 were sold in Australia – presumably out of dealer stock.

Positive global outlook
If Suzuki's market situation in Australia is occasionally volatile, the parent company is happy with its global results at least.

"I'm sure Hyundai would rather our market share in India, than their market share in Australia," Moore suggested.

"Any car's got to have economies of scale by having volume through its production line. If you can sell 'x' number of cars in India, it's going to be a different type of car from what you can sell in Australia."

Suzuki sells 700,000 cars a year in Japan, and enjoys 40 per cent market share in India, but it's the company's "big growth aspirations in Europe" that will help the importer in Australia.

"It's probably not like just two guys running a hundred-metre race. Hyundai [is] successful in markets that align better to Australia, [so they] sell more cars in Australia.

"We're more successful in markets that don't align so well with Australia – ie: India, Japan… kei cars..."

But as Suzuki focuses its attention on European markets, there will be a larger number of models in the pipeline that will 'align' with Australian tastes and needs too.