Fuji Heavy Industries’ withdrawal from mini car production leaves Daihatsu and Suzuki to vie for No. 1 place
5, 23. 2008
Fuji Heavy Industries is withdrawing from the development and production of mini cars. The company, however, plans to maintain the numbers of models and sale of mini cars at the current levels by shifting gradually to the supplies of mini cars of the Subaru brand from Daihatsu Motor Co. as an OEM. The change in the Fuji's policy invited the breaking out of a competition between Daihatsu and Suzuki Motor Corp. with the No. 1 place of Japan's mini-car makers at stake.
Suzuki may win the No. 1 place from behind in FY 2008
Nissan gets mini-car supplies from Suzuki (Pictures shows Nissan Pino)
The new mini-car registrations in fiscal 2007 totaled about 1,890,000 units, up 6.8% over the previous year. Daihatsu, which sold about 613,000 units (down 6.8% on year), accounted for the largest sales share at 32.4% for the second consecutive year. Its rival Suzuki sold about 587,000 units (down 3.0%) for a sales share of 31.0%. The difference in the sales between the two companies was thus only 26,000 units.
Daihatsu clinched the first place in mini-car industry two years ago when Suzuki's mini-car production went down as a result of the company's shifting of production and supplies for overseas markets where sales were brisk rather than maintaining its top place in the domestic sales share. Suzuki's new Sagara plant is scheduled to start operation in the fall of 2008
Osamu Suzuki, president of Suzuki, said his company was not satisfied with keeping the second place forever, indicating the company is trying to get the chance to regain the first place.
Besides the inauguration of the Sagara plant, Suzuki is also to do a full model change of its main model Wagon R in the second half of 2008. Daihatsu, in the meantime, is plunging in the lull time between the introduction of new models, and it is not expected to increase its sales. Suzuki, therefore, holds the upper hand in the sales in fiscal 2008, and it is likely that the company will surpass Daihatsu to become the top seller within fiscal 2008 at earliest.
However, the title of No. 1 can not be clinched by winning only in the sales race. The mini-car manufacturers are competing also in the production. Suzuki is supplying cars to Nissan and Mazda under the OEM arrangements. The mini cars sold by Mazda are made by Suzuki. Nissan is procuring mini cars from Suzuki and Mitsubishi Motors Corp. Nissan is supplied by Suzuki with the Moco based on the MR Wagon and the Pino based on the Alto.
Of the new mini-car registration in fiscal 2007, the cars sold by Mazda totaled about 57,000 units (up 6.9% on year), while Nissan sold about 142,000 units (down 1.5%), including 79,000 cars (up 4.6%) made by Suzuki. The new mini cars produced and sold by Suzuki in fiscal 2007 thus totaled about 724,000 units (down 1.5%), including those supplied to Nissan and Mazda.
On a sales basis of the cars produced, Suzuki's domestic sales share for fiscal 2007 comes out to be 36.3%, far surpassing that of Daihatsu. The new car registration for the mini cars produced manufactured by Daihatsu and Fuji amount to 748,000 units in fiscal 2007 (down 3.4%), accounting for a 38.1% market share.
Daihatsu aims at 40% share on production basis
As a result of Fuji's switchover of its Subaru mini cars to cars to be produced by Daihatsu gradually from the second half of 2008, vying has started between the Daihatsu-Suzuki ally and the Suzuki-Nissan-Mazda ally for the No. 1 place in the mini-car industry, including the domestic sales of cars under OEM arrangements.
Daihatsu's OEM supplies to Fuji not only help the Daihats to reduce the production cost by increasing the production but also help the company achieve the sales share target of more than 40% requested by Toyota in the past. Toyota is aiming at achieving a 40% sales share on the domestic market for all of its models. This is why Hino Motors is also aiming at a 40% share on the truck market.
Daihatsu could finally obtain more than 30% of market share for mini cars as other carmakers were making effort to increase their sales of other types of registration cars, while Mitsubishi's share decreased as a result of its involvement in a scandal. But the market share of 40% has been far above its ability because of the existence of the tough competitor Suzuki. Because of the Fuji's proposal for the OEM supplies, however, it has now become possible to the company to achieve the 40% market share counting the sales of cars it will produce and supply to Fuji.
Kunio Mori, president of Fuji, is said to intend to maintain the sales of 140,000 mini cars a year after changing over to the OEM arrangement with Daihatsu. After Toyota invested in Fuji, Mori said his company would like to make contributions as a member of the Toyota group in the field of mini-car sales. This indicates that the ally of the two companies will engage in a severe sales competition starting in the second half of 2009.
The problem, however, is how Daihatsu will supply cars to Fuji under the OEM arrangement. Unless it can make mini cars for Fuji that will match the old brand of the "Subaru 360," there will be the danger of dwindling in the sales of Fuji mini cars which have so far attracted many fans.