Suzuki Exits China, India Is Now Its Biggest Priority

Suzuki Exits China

Suzuki has sold all its stakes in the JV to the Chinese partner as shares have dropped consistently in recent years

Among the top automobile markets in the world, China does have a unique band of customers as they prefer country-specific vehicles with the spacious cabin. The People’s Republic is the largest car market in the world and responsible for highest EV sales than anywhere else.

However, not all brands are welcomed there as Suzuki Motor Corporation has found out in recent times with plummeting sales figures. Despite an ambitious start, Suzuki fell by the wayside and it has quit the market altogether to concentrate more on the specific countries that contribute to the majority of its overall sales.

Just like every other automaker, Suzuki had Chongqing Changan Automobile Co., as its local partner in China and they have officially announced the split now. Suzuki has sold its stakes in the JV to the Chinese partner as shares dropped consistently and now Changan Automobile owns the whole company.

The equity transfer will complete upon the end of legal proceedings with Chinese authorities while it won’t affect Suzuki’s financial performances this FY. The move comes more than six years after Suzuki decided to quit US and its absence in the two of the largest auto markets will be clearly felt throughout.

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Suzuki, a worldwide leader in small car space, has been facing tough competition even at its home market of Japan. However, the same cannot be said for its Indian operation as MSIL (Maruti Suzuki India Limited) is riding high on sales growth more often than not and has billions in cash reserve.

India is one of the rapidly growing emerging markets in the world, and MSIL grabs hold of more than 50 percent of the market share for long. A recent report suggested that Suzuki is investing more than Rs. 9,000 crore in its Gujarat facility to double up the overall volume to three lakh units per annum in the coming years.

The exit from China could turn out to be a positive affair for India considering the high implication in the Suzuki and Toyota partnership. Both the companies are sharing vehicles from next year onwards and will strategically cooperate in terms of future electrification and autonomous technologies.