The Japanese Yen exchange rate is hurting imports from Japan to the UK – so you would think Japanese brand Suzuki would be particularly badly hurt.
Not so. Out of its UK range, only the Grand Vitara and Jimny actually come from Japan. Surprised? That’s modern vehicle manufacturing for you.
The Swift, SX4 and Splash are built at Suzuki’s Hungarian plant, while the Alto city car comes from India.
Suzuki is also taking steps to mitigate the exchange rate effects on the Grand Vitara and Jimny, of which around 3000-3500 are sold each year (1000 Jimny, 2500 grand Vitara).
“We are taking all factors into account and holding onto the costs for the Japanese built cars,” said UK PR head Alun Parry. Presumably, this includes cutting margins to a bare minimum (or entirely) and convincing dealers of the longer-term benefits of each sale.
“Loyalty amongst Grand Vitara and Jimny owners is very strong – some are onto their fourth or fifth model.” Each is thus a good customer for Suzuki dealers to retain, which is why Suzuki is facing the exchange rate challenge rather than cancelling imports entirely.
It’s not easy. There’s a double whammy with the Grand Vitara in that the diesel engine also has to be bought in – the 1.9-litre Renault dCi is thus an additional expensive challenge for the UK importers to face.
So, to drive profits elsewhere, Suzuki is dipping its toe into fleet sales. Currently, retail-biased Suzuki sells only 10% to corporate and business sales. It plans to grow this, by seeking incremental fleet business where it makes sense.
Hence, the introduction of the Swift diesel. “This is being marketed at higher mileage drivers, such as driving schools. There is only one mid-range trim and a sub-£13,000 price, and we’re hoping low whole-life costs will help make a case for it.”
It does not make sense for lower mileage drivers, admitted Parry, but the fuel economy, competitive list price and Japanese reliability will all appeal to organisations such as driving schools.
Expect to see more niche-chasing fleet business from Suzuki throughout the year. Not least in September, when the all-wheel-drive Kizashi D-sector saloon arrives in the UK – just in time for winter…
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