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Old 26th December 2008, 20:17   #1
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Default Suzuki sees a Tsunami in 2009

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Osamu Suzuki has seen it all. The 78 year old patriarch was 15 when WW II ended. He has seen and successfully overcome the oil shocks of the 1970s and a number of other major business hardships during his career. Suzuki is not ready to retire. Actually, he took on another job: Two weeks ago, Suzuki’s President and Chief Operating Officer Hiroshi Tsuda asked to step down “for health reasons.” Suzuki, Chairman of Suzuki Motor Corp., decided not to replace Tsuda and took his job. Today, the Nikkei had a little chat with Osamu Suzuki. What they heard wasn’t pretty: “We have not hit bottom yet,” says Suzuki. ”There is a time lag between what is happening with the Big Three U.S. carmakers and the impact that will have in Japan. It is as if tsunami waves are rolling toward Japanese shores. I believe a real wave will hit us around July or August next year, with car sales hitting rock bottom.” Asked, what management should do when it finds itself in a crisis, Suzuki has a simple answer:

“The No. 1 priority is to cut down in-house costs as quickly as possible.”
Then, the patriarch makes a startling assertion. Asked whether a sales recovery in the U.S. would be key to a turn-around in the auto industry, Suzuki answers:
“No. A more pressing problem is that people are losing interest in owning cars, and we have to do something about that. Young people today (in Japan) are not afraid to say that they do not have a driver’s license.”
The last fact had been mentioned several times by TTAC’s B&B: Young people aren’t car crazy anymore. In the emerging markets, they still are. There, a car is a symbol that you’ve made it, a car gives you freedom to go wherever you want. Not longer so in highly developed markets, In Manhattan, in Tokyo, in Berlin or London, a car is a liability. You don’t need the car to get the girl. In the suburbs, the car has turned from an object of desire to a nuisance you are forced to have and maintain. Then, there’s the simple fact that there aren’t enough young people, especially in Japan and Europe.
In this regard, even Suzuki’s sage wisdom comes up a little short:: “We need to reconsider ways to sell cars, like musical instrument maker Yamaha Corp did with pianos. It succeeded in stimulating children’s interest in the piano during a major sales slump by increasing the number of piano lessons across the nation.”
No amount of driving schools will stem the tsunami waves.
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Old 27th December 2008, 00:55   #2
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That's a very, very interesting observation from the old man. And in fact even in some cities of India like Mumbai for instance owning a car is more of a headache that the youngster's would rather avoid for obvious reasons.

Countries like Japan and other developed countries in Europe really have their work cut out to tackle this potential problem.

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Old 27th December 2008, 06:38   #3
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Its a fact and one that you're constantly reminded of when you look for parking space - often in Dubai the journey to your destination takes less time than the search for parking at the destination. Its very frustrating, and some of us have started parking cars outside crowded destinations to take a taxi or bus into that place.
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Old 27th December 2008, 15:10   #4
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Yes iraghava and Steeriod- as we here are a growing economy, ownership of a car is still considered a status symbol. In the metros even that is on the wane. And Steeriod you are experiencing it first hand in your place of work.We all can experience the travails of car ownership, whenever we are in a developed country, with cars flooding down town areas everywhere.
In India, our income disparities are very wide car ownership will continue to be a signal showing that "I've arrived". Today it becomes a prized possession for the middle and upper middle class here, where the market penetration is yet to be fully explored and experienced by car-makers. And when the middle class wants to upgrade and rid themselves of their low end cars, these old cars will land up in used car markets to sell for under Rs 1L.Some from the lower middle class will then buy these cars and the cycle goes on.
So it will take many, many years till our market reaches the conditions reached by the developed countries which are being spoken of by Mr Osamu Suzuki, solely due to our income disparities and the vast population of our country.
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Old 5th January 2009, 13:22   #5
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Sharp observations by the ever effervescent Mr Suzuki. The only difference between our Metros and the Tokyos, Londons and NYs is that they have a highly developed public transport system.

The time will come when our metro systems have a wider reach and are well connected by an efficient bus transport system that will get you to your doorstep. When that happens, owning a car will seem a chore. Of course, Bhpians will remain an exception to the rule!
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Old 5th January 2009, 14:18   #6
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See this link for an industry-respected source of independent analysis. This is their forecast for 2008 and 2009:

Global Insight // Same-Day Analysis
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Old 5th January 2009, 19:20   #7
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Quote:
Originally Posted by MaserQ View Post
Sharp observations by the ever effervescent Mr Suzuki. The only difference between our Metros and the Tokyos, Londons and NYs is that they have a highly developed public transport system.

The time will come when our metro systems have a wider reach and are well connected by an efficient bus transport system that will get you to your doorstep. When that happens, owning a car will seem a chore. Of course, Bhpians will remain an exception to the rule!
Well said teambhpians are a class apart!
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