The diminishing popularity of small vehicles has had a significant effect on Suzuki in China. A new report from NHK World says that the company will stop producing cars in China and may focus resources on India, which is an important market for it globally.
Suzuki has already stated that currently, it is prioritising investment for growth centered in India. India is the company’s main overseas market, where it sold 16,09,086 vehicles in 2017. Relatively cheaper and popularised by the sub-4 metre rule, B-segment cars are going to be in a very high demand for the foreseeable future. The A-segment is also dominated by Suzuki.
In China, customers are increasingly demanding luxury models and larger vehicles. Another hindrance in growth Suzuki may have to contend with is the country’s law that pushes automakers to produce more and more New Energy Vehicles (PHEVs, BEVs and FCEVs).
Suzuki operates in China via two joint venture companies: Changhe Suzuki Automobile Co. and Changan Suzuki Automobile Co. Just a few days back, the company announced the dissolution of its partnership with Changhe Automobile.
Suzuki has big plans for India. By 2020, it plans to sell two million vehicles annually here. To cater to the growing demand, its local subsidiary plans to grow its sales network to 4,000 outlets by the end of the decade. In 2020, the first-ever Maruti Suzuki EV based on the Maruti Wagon R will be launched in 2020. Also, Suzuki has formed an agreement with Toyota to share vehicles and technologies in India.
[Source: NHK World]