ANNUAL REPORT2018

Contents
A Message from the Management_____________________________________________ 2
Financial Highlights__________________________________________________________ 4
Year in Review_______________________________________________________________ 6
Automobiles_____________________________________________________________ 6
Motorcycles______________________________________________________________ 8
Marine, etc._____________________________________________________________ 10
ESG Information____________________________________________________________ 11
Environmental Initiatives_________________________________________________ 11
CSR Policy______________________________________________________________ 13
Corporate Governance____________________________________________________ 14
Directors, Auditors and Officers_________________________________________ 14
Corporate Governance Issues___________________________________________ 15
Risks in Operations____________________________________________________ 16
Financial Section___________________________________________________________ 18
Company Outline___________________________________________________________ 48—1—
SUZUKI MOTOR CORPORATIONA Message from the Management

A Message from the Management
Outstanding issues

Thank you very much for your continued support.

The automobile industry is undergoing a period of great transformation. In such transformation, it is necessary to open up
the future in long-term outlook by imaging the targeted aspect of 10 years and 15 years ahead, and tracing back to thepresent to think about what should be done from now.
In or around 2030, there is possibility that India would growup to be a market of 10 million units. If we are to maintainthe current market share of 50%, Suzuki would become 5
million units. Suppose the other markets would be 2 million
units, Suzuki as a whole would be 7 million units. This is rather a theoretical figure than a target, but Suzuki will challenge
toward the future growth.
Also, we believe that fulfilling India would lead to fulfilling other markets through globally expanding the models developed
for India.
But still, this is a total frontier for the Company, which would
be more than double the present size. The management andevery single one of our employees need to change the way of
thinking and effectively distribute management resources ofpeople, goods, and capital.
By that means, the activity toward this long-term outlook is achallenge that dedicates future of Suzuki without extension.
Amidst such conditions, the Group is addressing the following
issues.

Management results of FY2017
With respect to the management environment of the Groupfor FY2017, the economy is recovering moderately as awhole. On the other hand, there are concerns about the influence of the US tariff policy, uncertainties about prospects
for the economy of China and developing countries in Asia,and others. In India, an important market for the Group, theeconomy is expanding mainly owing to increase of domestic
consumption. Also in Japan, the economy is recovering moderately on the back of various measures introduced by thegovernment.
Under these circumstances, the consolidated net sales of the
fiscal year (April 2017 to March 2018) increased by ¥587.7
billion (18.5%) to ¥3,757.2 billion compared to the previous
fiscal year. The Japanese domestic net sales increased by¥79.2 billion (7.6%) to ¥1,116.7 billion year-on-year mainly
owing to increase in automobile sales. The overseas net sales
increased by ¥508.5 billion (23.8%) to ¥2,640.5 billion yearon-year mainly owing to increase in automobile and motorcycle sales in markets including India and Europe.
In terms of the consolidated income, the operating income
increased by ¥107.5 billion (40.3%) to ¥374.2 billion year-onyear mainly owing to improvement in profit in Asia, Japan, andEurope. The ordinary income increased by ¥96.1 billion (33.5%)
to ¥382.8 billion year-on-year. The net income attributable toshareholders of the parent increased by ¥55.7 billion (34.9%)
to ¥215.7 billion year-on-year.

n Quality
The quality problem remains unchanged as the most important issue for the Company.
Customer safety and security is the top priority for the Group,
and we are working to develop and produce high-quality
products which customers can use safely and securely and toprovide after-sales services.
In the future, while accurately ascertaining the quality needsof customers, the Group will maintain a high level of quality
awareness in all departments and will continue to make theutmost effort to ensure that customers can use our products
safely and securely.

Basic policies for profit distribution
Under the Mid-Term Management Plan SUZUKI NEXT 100(from FY2015 to FY2019), the Company prioritises investment for growth, and set the dividend payout ratio target to
15% or more.
The Company was able to achieve the FY2019 net sales targetof ¥3,700 billion and operating income margin target of 7% in
the fiscal year, which is ahead of schedule. On the other hand,
improvement of shareholders’ equity ratio remains an important issue.
Taking the above into consideration, the Company applied
the dividend payout ratio target of 15% to the annual dividends, which became ¥74.00 per share, up by ¥30.00 per
share from the previous fiscal year, and to the year-end dividends, which became ¥44.00 per share.
The annual dividends of ¥74.00 per share is the eighth consecutive increase in annual dividends.

—2—
SUZUKI MOTOR CORPORATIONA Message from the Management

Other reforms include reinforcing the scooter category in thegrowing market of India, improving operation rate by expanding ASEAN-produced models within and outside the market,
and consolidating development, production, and sales at theHamamatsu Plant. The Group will aim to maintain its profitablestructure through continuously remaining vigilant with suchmanagement reforms.

n Products and R&D
As for products, along with continuing to introduce uniqueproducts with value exceeding customer expectations, with
2030 in mind, we need to efficiently set development models
while the sales units continue to expand.
As for environmental problems, we not only need to boost
the extension of conventional technologies but initiatives for
new technologies as well. Along with making of small carsand development of high-efficiency powertrain which Suzuki
excels in, we will proactively make efforts in expansion andstrengthening of hybrids and new development of EVs.
Further, we will also work on safety technology and information communications technology such as connected
technology.

n Marine Business
The Group will reinforce and expand its large four-stroke outboard lineup and cultivate the business and leisure markets
to build the world’s top four-stroke outboard brand under thebrand slogan “THE ULTIMATE 4-STROKE OUTBOARD.”n Further ESG (Environmental, Social, and Governance)
Initiatives
As for environment, the Group will apply the Suzuki Environmental Plan 2020 and work for the development and adoptionof environmental technologies and to reduce CO2 emissions.
As for society, we will actively work on product safety andquality, contribution to the community, investment in people,
development of human resources, and work safety, so that
we can respond to expectations by the stakeholders.
As for governance, we will advance our corporate governanceand compliance systems and strengthen our initiatives on
management systems and legal compliance.
The Group will actively take on environmental, social, andgovernance issues and strive to become a group worthy ofthe love and confidence of customers around the world.

n Production
As for production, the Group will work to construct Safety Firstand optimal global production system. In India, in particular,
we will proactively work on strengthening production system
of Gujarat Plant and battery plant from the Make in India pointof view, which is an initiative promoted by the Government ofIndia.
n Sales and Service
The Group will reinforce the sales network and service network globally.
In India, in particular, although we currently have acquired the
majority share in the passenger car sector, we would like tosecure the majority share even in 2030. We will proactively
deal with ways to realise this in detail.

With respect to the case in August 2018 where emission andfuel consumption sample testing result that should be madeinvalid was treated as valid data, we would like to offer oursincere apologies for the concern this matter has caused toour customers and business partners. We will make efforts inpreventive measures through fulfilling checking structure andcarrying out thorough employee education.

n Automobile Business
The Group has positioned Japan at the centre of global automobile development, the base of production.
Our strategy for products in this sector is to concentrate on
the mini vehicle, A, and B segments to match the growing
compact car market worldwide.
As for our regional strategy, we will continue to reinforce ouroperation base with a focus on Asia, such as Japan, India, Indonesia, and Pakistan.

As mentioned before, the activity toward the long-term outlook is a challenge that dedicates future of Suzuki without
extension. The Company as a whole will make efforts toward
this initiative.

n Motorcycle Business
While focussing on the 150cc and up, backbone, and sport
categories, the Group is strengthening the consistency of
the Suzuki brand by ranging the series from large engine displacement motorcycles to small engine displacement motorcycles.

We look forward to the continued support and encouragement of our shareholders and investors.

Representative Director and President
Toshihiro Suzuki—3—
SUZUKI MOTOR CORPORATION

Financial Highlights

Financial Highlights

Years ended 31 Marchn Net sales by geographic region (Millions of yen)
Japan

Asia

EuropeNorth American Net sales by segment (Millions of yen)

OthersAutomobiles

Motorcycles

Marine, etc.

3,757,219

3,757,219

75,053294,210

246,362

62,454
3,180,659

510,6433,015,461
2,938,314
229,69365,084

398,9023,180,659

3,169,542

268,325

266,329

257,585

67,002

56,1153,015,461
2,938,314

63,033

3,169,542

68,253

67,633233,889

206,289

56,046
250,485
266,60265,976
404,722425,332

372,028

1,773,145

1,111,900

1,394,720

1,214,519

1,392,961

3,435,802

2,615,664

1,132,732

1,094,611

1,047,883

1,037,546

2014

2015

2016

2017

n Operating income (Millions of yen)
374,1822,878,515

2,895,619

2016

2017

2,701,942

1,116,764

2014

2018

n Net income attributable toowners of the parent

2015

n Dividends (Yen)
Year-end dividends
Interim dividends
Dividend payout ratio
Dividend payout ratio (excl. gainon sales of investment securities)

215,730
Operating income

Net income (Millions of yen)MarginNet income per share (Yen)2018488.8674
266,685

159,956

17.3%
15.6%

362.54
10.0%
187,747

195,308
179,424

107,484
96,862
191.60

6.0%

6.1%

172.67

2016

2017

2018

2014

2015

44

32

14

2015

15.1%

44

234.98

24

2014

12.1%

116,660
8.4%

6.4%

15.2%
13.6%

12.5%

2016

2017

2018

—4—
SUZUKI MOTOR CORPORATION

27

27
17
17

30

10

10

2014

2015

15

17

2016

2017

2018

Financial Highlights

Years ended 31 Marchn Capital expenditure/Depreciation

		

n ROE

n R&D expenses (Millions of yen)

(Millions of yen)

Capital expenditure

R&D expenses

Depreciation

Ratio of R&D expenses to sales

213,619
198,782

194,457

171,535
168,315

131,539
127,090 125,897 131,031

213,376

ROE

139,390
17.9%
15.4%

163,397

150,877

4.3%

134,377

4.2%

4.1%

4.2%

3.7%

117,188

9.6%

8.7%
6.9%

2014

2015

2016

2017

2018

2014

2015

n Total assets/Net assets/Shareholders' equity ratio

			

2016

2017

Net assets

3,340,828
3,115,985

2,874,074

2017

322,915445,171

294,095

255,037
134,12845.6%

84,472

2,809

103,586

77,751

51,66036,356

38.8%

35.9%

35.4%

1,701,390

2018

366,315

2,702,008

46.2%

2016

Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
Free cash flows

Shareholders’ equity ratio

3,252,800

2015

n Cash flows (Millions of yen)

(Millions of yen)
Total assets

2014

2018

89,505

1,595,227

1,494,357

1,387,041
1,187,703-113,922-120,909-242,435-288,564-286,559-341,585

2014

2015

2016

2017

2018

-520,361

2014

n Automobile production(Thousand units)

n Automobile sales

2015

2016

n Motorcycle production(ATV included)(Thousand units)(Thousand units)

2017

2018

n Motorcycle sales(ATV included)(Thousand units)

3,338
3,043
2,857

3,224

3,074
2,951

2,867 2,861 2,918

Overseas

2,709

Japan
2,367
1,859

1,988
2,090

2,033

2,203

2,556
1,981

2,111

2,022
1,799

1,766

2,231 2,279

1,630
1,480

1,367

1,370

1,852

1,948

1,645
1,358 1,229
998

1,055

861

871

1,580

1,501

1,699

1,478

1,440

1,305

1,520

971
728

756

630

639

668
180

2014 2015 2016 2017 20182014 2015 2016 2017 2018

154

122

141

152

2014 2015 2016 2017 2018

—5—
SUZUKI MOTOR CORPORATION

74

67

61

62

60

2014 2015 2016 2017 2018

Year in Review

Year in Review* Sales units are based on Suzuki research on outside datas.

Automobiles
Years ended 31 Marchn Production units
2017

n Operating results of automobile businessn Sales units
1,781

2018

(Thousand units)

2017

2018

(Thousand units)

1,654

971

India

Asia

(excl. India)

3,550

2,551

10.3％

439

404

281

180
Europe(100 million yen)Margin

8.8％

668

Japan

Segment profit

Japan

Europe

182
India

Asia

(excl. India)

Others2017

2018

Suzuki’s Worldwide Manufacturing and Sales
Total overseas automobile production for FY2017 increased by 7.4% year-on-year to 2,367,000 units. Worldwide production, including Japan,
also increased by 8.6% year-on-year to 3,338,000 units.
Sales of automobiles in overseas market increased by 12.1% year-on-year to 2,556,000 units, while total global sales, including Japan, also
increased by 10.5% year-on-year to 3,224,000 units.

Operating Results by Segment
The Japanese domestic automobile net sales increased year-on-year mainly owing to sales contribution of new models Spacia and XBEE
launched in December 2017, in addition to WagonR and Swift launched in the previous fiscal year. The overseas automobile net sales increased year-on-year mainly owing to increase in sales in markets including India, which launched the new Dzire and Swift, as well as Europe.
Consequently, the net sales of the automobile business increased by ¥540.2 billion (18.7%) to ¥3,435.8 billion year-on-year. The operating income increased by ¥100.0 billion (39.2%) to ¥355.0 billion year-on-year mainly owing to improvement in profit in Asia, Japan and Europe.

Japanese Market
1. Overview of the Japanese Automobile Market
Total domestic automobile sales volume in FY2017 increased for the second consecutive fiscal year by 119,000 units (2%) from 5,078,000 units
in the previous fiscal year to 5,197,000 units.
Sales of minivehicles led the whole market with an increase of 8% year-on-year to 1,859,000 units, owing to the success of full-model changeof main models by each company, despite the decrease in standard and small vehicles by 1% year-on-year to 3,338,000 units.

2. Suzuki Sales
Suzuki’s domestic automobile sales in FY2017 increased for the second consecutive fiscal year by 5% year-on-year to 668,000 units.
Suzuki’s sales of minivehicles increased for the first time in three fiscal years by 5% year-on-year to 556,000 units, mainly owing to thefull-model change of the all-new Spacia. Suzuki’s sales of standard and small vehicles increased for the third consecutive fiscal year by 5% yearon-year to a record-high of 112,000 units. The key drivers of that growth were the all-new Swift Sport launched in September and the all-new
crossover wagon XBEE launched in December 2017.

3. Suzuki Topics in FY2017• Swift Hybrid installed with hybrid system was introduced to the Swift compact car series in July, and full-model change of the Swift Sport was
launched in September 2017. And in November 2017, the Swift series received the 2018 RJC Car of the Year award for the third consecutive
generation model.
• Full-model change of the all-new Spacia and Spacia Custom minicars were launched in December 2017.
• All-new XBEE compact passenger car was launched in December 2017.

Swift Sport(launched in September 2017)

Spacia(launched in December 2017)

Spacia Custom(launched in December 2017)

XBEE(launched in December 2017)—6—
SUZUKI MOTOR CORPORATION

Year in Review

Overseas Markets
1. Overview of Suzuki’s Main Overseas Automobile Markets
New car sales (total market of passenger and commercial vehicles) in India increased in FY2017 by 10% year-on-year to 4,144,000 units,
while new car sales in Europe increased by 2% year-on-year to 20,820,000 units.
As for other countries and areas, new car sales in Indonesia increased by 4% year-on-year to 1,107,000 units, Pakistan increased by 18%
year-on-year to 247,000 units, Oceania in total increased by 5% year-on-year to 1,387,000 units, and Latin America in total increased by 9%
year-on-year to 6,047,000 units, while the Middle East in total decreased by 8% year-on-year to 2,235,000 units, and Africa in total decreased
by 4% year-on-year to 1,188,000 units.

2. Suzuki Sales
Suzuki’s overseas automobile sales volume in FY2017 increased by 12% year-on-year to 2,556,000 units. Suzuki’s sales in India increased by
15% year-on-year to a record-high 1,654,000 units owing mainly to strong demand for models including the Baleno, Vitara Brezza, and Dzire,as well as launching of the all-new Swift. Suzuki’s sales in Europe increased by 15% year-on-year to 281,000 units owing to launching of the
all-new Swift and Ignis, in addition to strong demand for other lineup of models.
As for other countries and areas, Suzuki’s sales in Indonesia increased by 24% year-on-year to 114,000 units, Pakistan increased by 23%
year-on-year to 139,000 units, Oceania in total increased by 3% year-on-year to 27,000 units, Latin America in total increased by 14% yearon-year to 117,000 units, the Middle East in total increased by 29% year-on-year to 16,000 units, and Africa in total decreased by 6% yearon-year to 21,000 units.

3. Suzuki Topics in FY2017• The all-new Swift was unveiled to the overseas market for the first time at the Geneva Motor Show in March 2017 and subsequently started sales in the overseas market. The all-new Swift is produced in and exported from Japan, India, and Thailand.
• In April 2017, Suzuki’s Hungarian subsidiary Magyar Suzuki Corporation achieved accumulated production of 3 million units. Up until now,cars produced in Hungary have been exported to more than 100 countries and regions worldwide.
• The all-new Swift was selected as TOP3 of the 2018 World Urban Car category at the World Car Awards in March 2018. This is the second
consecutive year for Suzuki’s model to be selected as TOP3 following the Ignis in 2017.

Swift (unveiled for overseas market in March 2017)—7—
SUZUKI MOTOR CORPORATION

Year in Review

Motorcycles
Years ended 31 Marchn Production units (ATV included)
2017

2018

1,431

n Sales units (ATV included)(Thousand units)

2017

n Operating results of motorcycle business(Thousand units)

2018

1,261

Segment profit
Margin(100 million yen)

46

1.9％
152

42

60

Others

Japan

4
Japan

North America

Asia

184
40

35

Europe North America Asia

Others

-9
2017

2018

Suzuki’s Worldwide Manufacturing and Sales
Total overseas motorcycle production (including ATVs) in FY2017 increased by 20.2% year-on-year to 1,478,000 units. Worldwide
production, including production in Japan, also increased by 19.0% year-on-year to 1,630,000 units.
Sales of motorcycles (including ATVs) in overseas market increased by 16.4% year-on-year to 1,520,000 units, while total global sales,
including Japan, also increased by 15.5% year-on-year to 1,580,000 units.

Operating Results by Segment
The net sales increased by ¥40.1 billion (19.4%) to ¥246.4 billion year-on-year mainly owing to sales contribution of scooters in India
and large displacement models in developed countries. The operating loss of ¥0.9 billion in the previous fiscal year improved to an
operating income of ¥4.6 billion.

Japanese Market
1. Overview of Japanese Motorcycle Market
The total domestic motorcycle sales (factory shipments) of the four Japanese manufacturers in FY2017 increased by 2% year-on-year to349,000 units. Sales of models with engine displacements of 126cm3 and higher were up 29% year-on-year at 97,000 units. Sales of models
with engine displacements up to 125cm3 were down 5% year-on-year at 252,000 units. While there are structural concerns of poor demandin the domestic market such as aging of users and decrease in younger population, it is assumed that last-minute demand of models whichwere discontinued due to environmental restrictions, and launching of new models raised the level of demands.

2. Suzuki Sales
Suzuki’s domestic sales (factory shipments) in FY2017 were flat on the year at 60,000 units. Sales of models with engine displacements of
126cm3 and higher were up 73% year-on-year to 14,000 units. Sales of models with engine displacements up to 125cm3 were down 11%
year-on-year to 46,000 units. Models with engine displacements between 126cm3 and 250cm3 largely grew by 121% to 9,000 units owing tolaunch of new models GSX250R and V-Strom 250. On the other hand, models with engine displacements of up to 125cm3 fell year-on-year
owing to decrease of models due to environmental restrictions.

3. Suzuki Topics in FY2017• Japan specification model of Suzuki’s flagship supersport bike, the all-new GSX-R1000R ABS, was launched in July 2017. With the conceptof No.1 Sportbike, by thoroughly reviewing the fundamental design and adopting technologies developed in MotoGP, it underwent its firstfull-model change in eight years, and Japan-specification model was launched for the first-time ever.
• GSX250R and V-Strom 250 received the 2017 Good Design Award in October 2017. They were valued for having different concepts and designs while sharing the common platform.

GSX-R1000R ABS (launched in July 2017)

GSX250R (launched in April 2017)—8—
SUZUKI MOTOR CORPORATION

V-Strom 250 (launched in July 2017)

Year in Review

Overseas Markets
1. Overview of Suzuki’s Main Overseas Motorcycle Markets
Sales of motorcycles in Europe in FY2017 decreased by 8% year-on-year to 961,000 units. Sales of motorcycles (including ATVs) in North
America also decreased by 2% year-on-year to 777,000 units.
Sales in the six key ASEAN countries (Indonesia, Thailand, Vietnam, the Philippines, Malaysia, and Cambodia) increased by 5% year-onyear to 13,146,000 units. Sales in China decreased by 1% year-on-year to 7,796,000 units. Sales in India increased by 15% year-on-year to
20,193,000 units.

2. Suzuki Sales
Suzuki’s overseas motorcycle sales in FY2017 increased by 16% year-on-year to 1,520,000 units.
Sales in Europe decreased by 11% year-on-year to 40,000 units, but North America increased by 11% year-on-year to 35,000 units.
Sales in the six key ASEAN countries increased by 12% year-on-year to 296,000 units, China increased by 9% year-on-year to 392,000 units,
and India increased by 43% year-on-year to 501,000 units.

3. Suzuki Topics in FY2017• Full-model change of motocross bike RM-Z450 was announced in July 2017.
• New standard model SV650X ABS was unveiled at EICMA (Milan Show) held in Milan, Italy in November 2017.
• New 125cm3 scooter BURGMAN STREET produced by Suzuki Motorcycle India was unveiled at the Auto Expo held in India in February 2018.
• New 125cm3 scooter SWISH produced by Tai Ling Motor was announced in Taiwan in March 2018.
• In its motorsport activities, Suzuki participated in the MotoGP class of the Road Racing Grand Prix with a new team structure. Also, the allnew supersport bike GSX-R1000 made excellent results worldwide. It won at the Isle of Man TT, achieved champions of superbike championships in the US and Australia, and ended second overall in Japan superbike championship and Endurance World Championship.

RM-Z450 (unveiled for overseas market in July 2017)

SV650X ABS (unveiled for overseas market in November 2017)

BURGMAN STREET (unveiled in India in February 2018)

SWISH (unveiled in Taiwan in March 2018)—9—
SUZUKI MOTOR CORPORATION

Year in Review

Marine, etc.
n Operating results of marine business, etc.
(100 million yen)Segment profit

Years ended 31 March

145

Margin

125

18.6％

19.4％

2017

2018

Operating Results by Segment
The net sales increased by ¥7.4 billion (11.0%) to ¥75.0 billion year-on-year mainly owing to sales contribution of new outboard motor DF350A
in North America and Europe. The operating income increased by ¥2.0 billion (15.9%) to ¥14.5 billion year-on-year.

Overview of Marine Products
Suzuki’s domestic outboard motor sales in FY2017 decreased by 2% year-on-year in volume terms and were flat on the year in net terms.
Suzuki’s export sales increased by 9% year-on-year in volume terms and by 17% year-on-year in net terms. This is owing to sales contribution ofmodels including the new outboard motor DF350A mainly in North America and Europe.
Suzuki’s four-stroke outboard motors range from the DF2 (the lowest-power model, which delivers 2PS) to the DF350 (the highest-power model,
which delivers 350PS). The Company produces small models in Thailand and larger models in Japan.

Suzuki Topics in FY2017• DF350A outboard (maximum output 350PS) equipped with new technologies including the contra-rotating propellers was unveiled in June
2017. It won National Marine Manufacturers Association’s Innovation Award in September 2017. Plus, DF325A (maximum output 325PS)
equipped with technologies common with the DF350A was unveiled in January 2018. DF325A has the maximum output in Suzuki’s lineup ofoutboards with regular petrol as its fuel.
• New outboard motor DF100B, the lightest model in the 100-horsepower class was unveiled in September 2017.

DF350A(unveiled in June 2017)— 10 —SUZUKI MOTOR CORPORATIONESG Information

ESG Information
Environmental Initiatives
As a manufacturer of automobiles, motorcycles, marine, and other items, Suzuki acts in consideration of the environment at all
product stages from development to disposal.
In product development, our environmental initiatives include improving fuel economy, reducing exhaust emissions, developing
next-generation vehicles, and acting in consideration of recycling. In manufacturing, our efforts include reducing global CO2
emissions, reducing energy requirements, and promoting the use of alternative energy sources. In distribution, we focus on improving the operational efficiency and energy efficiency of transportation and on promoting the 3Rs (Reduce, Reuse and Recycle).
In marketing, we promote environmental management among our dealers and strive to ensure proper disposal of end-of-life products.
We also pursue environmental initiatives that are not directly related to our products. For instance, we promote energy savings andgreen purchasing in our offices, give our workers environmental education, and support social action programs in local communities.

Suzuki Environmental Plan 2020
The Company newly established and announced the Suzuki Environmental Plan 2020 presenting the direction and initiatives ofbusiness operations relating to the environment up to FY2020. New goals were set, including a 28% reduction in CO2 emissions due
to automobile use by 2020*1 and a 10% reduction in CO2 emissions from all production centres of the Suzuki Group, in Japan andoverseas, by 2020*2.
We believe that our most important task is to seriously recognise effects to environment generated from our business operations,develop products that carefully consider environment and promote business operations that reduce environmental effects. To
accomplish this, we are working on Suzuki Environmental Plan 2020 with Team Suzuki involving domestic and overseas affiliates tobuild the base for 2020, which is the 100th anniversary of foundation, and for the next 100 years, following the 4 themes listed below.
*1 Compared with FY2005.
*2 Compared with FY2010.

The details of the Suzuki Environmental Plan 2020 are available in the Suzuki CSR & Environmental Report. The report features ESG(environmental, social, and governance) initiatives and data receiving increased attention from stakeholders, including the environment, human rights, labour, and compliance.
Suzuki CSR & Environmental Report: http://www.globalsuzuki.com/corporate/environmental/report/— 11 —SUZUKI MOTOR CORPORATIONESG Information

Introduction of Electrification
Suzuki promotes reduction of CO2 emissions by introducing mild hybrid technology to compact/mini passenger cars and hybrid
technology adopting Suzuki’s original AGS mechanism.
Also, in order to reduce CO2 emissions furthermore and realise zero emissions in future, we promote the development of compact
EVs suitable for daily life.

Sales units of models equipped with hybrid system (Thousand units)
FY2016FY2017
Global automobile sales units Global automobile sales units
Of whichhybrids

Of whichhybrids

Japan

639

287

668

350

India

1,445

85

1,654

85

Others

835

17

902

27

Total

2,918

389

3,224

462

14.3%
13.3%
389
17

462
27
85

85

287

FY2016

Others
India

350

Japan
Ratio of hybrids
in global sales

FY2017* Hybrids include mild hybrid, S-ENE CHARGE, and SHVS.
* Hybrid sales units of Others are units exported from Japan and India.

Lineup of models equipped with hybrid system
Mini: WagonR/WagonR Stingray, Hustler, Spacia/Spacia Custom
Compact: Solio/Solio Bandit, Swift, XBEE, Baleno, Ignis, Ciaz, Ertiga, S-CROSS* Depending on the market, there are models that are not equipped with hybrid system.

Topics• In April 2017, Suzuki, Toshiba Corporation, and Denso Corporation reached basic agreement on establishing a joint venture company for
production of automotive lithium-ion battery packs in India, and signed the agreement. Subsequently, a ceremony for the cornerstone-laying of a lithium-ion battery plant was held in September. The battery pack manufacturing joint venture by the three companies will realisestable supply of lithium-ion battery packs in India in the course of promoting sustainable cars in the country and will contribute to “Make inIndia” initiative by the Government of India.
• In November 2017, the Company and Toyota Motor Corporation agreed to consider a cooperative structure with the aim of introducing
electric vehicles into the Indian market around 2020. Further, in March 2018, the companies came to a basic agreement to mutually supply
hybrid vehicles and other products in the Indian market. Both companies will continue to consider further cooperation with the goal of attaining a society of sustainable mobility.

— 12 —SUZUKI MOTOR CORPORATIONESG Information

CSR Policy
Structure for promoting CSR
At the Executive Committee meetings attended by Representative Directors and Directors and Managing Officers concerned, issues,policies, and measures concerning CSR activities are discussed. Along with the management, the Company as a whole, aims to promote viable CSR activities.

Steps in defining materiality (key issues) in CSR activities
We have defined the materiality (key issues) in CSR activities of the Suzuki Group, led by the departments in charge of CSR including
corporate planning departments (Corporate Communications and Corporate Management/IR) and environmental departments, using
the following steps.

Steps in defining materiality in CSR activities
Step 1

Extract issues based on GRI guidelines, etc.

Step 2

Departments in charge of CSR organise and discuss issues extracted, and decide their significance for the Suzuki Group

Step 3

Decide significance for the stakeholders through meetings with ESG investors and environmental NGOs

Step 4

Define materiality and decide their priority from two axis: significance for the Suzuki Group and for the stakeholders

Step 5Check their compliance with the mid-term management plan

The defined materiality is shown in the following matrix. Based on this materiality, the Company will work on the CSR activities andreview it periodically.
・Enhancement of product quality(development, production, sales, and service)・Traffic safety

・Reduction of CO2 emissions

・Environmental conservation

・Development and popularisation of environmental technologies

・Respect for human rights

・Development and popularisation of safety technologies

・Supply chain management

・Corporate governance and compliance・Stable growth of sales and income

・Effective use of resourcesHigh

Significance for the Stakeholders

Extremely High・Occupational health and safety

・Enhancement of corporate value(raw materials, energy, and water)・Nurturing of human resources

・Diversity

・Stable labour/management relations

・Educational support

・Enforcement of risk management

・Contribution to the local communities

High

Extremely High
Significance for the Suzuki Group

SDGs and CSR activities of the Suzuki Group
Sustainable Development Goals (SDGs), which were adopted by
the United Nations in September 2015, aims to realise better international society by setting 17 goals in society, economy, andenvironment to be worked on by 2030 and make efforts for theirsolutions. All entities including corporations and all persons in all
countries and regions are required to take necessary actions.
The Suzuki Group supports SDGs and will actively take responsibilities in goals that we can contribute in their achievements
through our CSR activities.
— 13 —SUZUKI MOTOR CORPORATIONESG Information

Corporate GovernanceDirectors, Auditors and Officers（as of 1 July 2018）[Representative Directors]
Representative Director and Chairman(Chairman of the Board of Directors)

Osamu Suzuki

Representative Director and Vice Chairman

Yasuhito Harayama

Representative Director and President

Toshihiro Suzuki

Supporting Chairman[Directors]
Director and SeniorTechnical Executive
Director andManaging Officer
Director(Outside Director)

Osamu Honda
Masahiko Nagao

Managing Officer in charge of Human Resources, and Executive General Manager, Corporate Planning OfficeHiroaki Matsuura

Executive General Manager, Manufacturing

Masakazu Iguchi
Sakutaro Tanino* Masakazu Iguchi and Sakutaro Tanino are the outside directors as stipulated in Article 2, Item 15 of Companies Act of Japan.

[Audit & Supervisory Board Members]
Kunio Nakamura
Audit & Supervisory
Board Member (full-time) Eiji Mochizuki
Audit & Supervisory
Board Member (Outside)

Norio Tanaka
Yasuhiro Yamazaki
Nobuyuki Araki* Norio Tanaka, Yasuhiro Yamazaki and Nobuyuki Araki are the outside audit & supervisory board members as stipulated in Article 2, Item 16 of Companies Act of Japan. Yasuhiro Yamazaki is a full-time audit & supervisory board member.

[Executive Vice President]
Executive Vice President

Kenichi Ayukawa

Managing Director and CEO, Maruti Suzuki India Ltd.

[Senior Managing Officers]
Senior Managing
Officer

Ichizo Aoyama

President, Automotive Electronics Power Private Limited

Toshiaki Hasuike

Executive General Manager, Automobile Engineering[Managing Officers]

Managing Officer

Kazuo Hakamata
Masato Kasai
Taisuke Toyoda
Keiichi Asai
Shuji Oishi
Kazuki Yamaguchi
Shigeyuki Yamamura
Toshiaki Suzuki
Hidenori Yamashita
Kinji Saito
Ichiro Onishi
Keiji Miyamoto
Kazuhiko Ayabe
Shinichi Imaizumi
Naoki Suzuki
Kazunobu Hori
Katsuhiro Kato
Shigeo Yamagishi
Yoshikazu Ozawa
Yasuharu Osawa
Satoshi Uchida
Shigetoshi Torii
Masayuki Fujisaki

Production & Purchasing, and Engineering, PT. Suzuki Indomobil Motor (Indonesia)
Managing Officer, Environment Engineering Group, Vehicle Regulations and Engineering Administration
Executive General Manager, FinancePresident, Chongqing Changan Suzuki Automobile Co., Ltd. (China)
Deputy Executive General Manager, Global Automobile Marketing
President, Suzuki Motor Sales Kinki Inc.
Managing Officer in charge of Human Resources Development
Executive General Manager, Domestic Marketing I, Domestic Marketing
Deputy Executive General Manager, Manufacturing
Executive General Manager, Global Automobile Marketing
Executive General Manager, Customer Quality Assurance and Service
Executive General Manager, Domestic Marketing II, Domestic Marketing
Executive General Manager, Purchasing
Deputy Executive General Manager, Domestic Marketing
Managing Officer in charge of Engineering, Corporate Planning Office
Managing Officer in charge of Engineering Human Resources
Executive General Manager, Automobile Product & Cost Planning
Executive General Manager, Vehicle Regulations and Engineering Administration
Managing Officer based in Maruti Suzuki India Limited (India Human Resources Management)
Division General Manager, Marine Operations
Deputy Executive General Manager, Motorcycle Operations, and President, Suzuki Motorcycle India Private Limited
Deputy Executive General Manager, Manufacturing
Managing Officer in charge of Partnership Promotion, Corporate Planning Office— 14 —SUZUKI MOTOR CORPORATIONESG Information

Corporate Governance Issues
1. Basic policy on corporate governanceThrough fair and efficient corporate activities, the Company always intends to be trusted by all our stakeholders including shareholders, customers, partner companies, local communities and employees, and to be a continuously growing company, while making afurther contribution to the international community. In order to realise that intention, the Company considers that the enhancementof the corporate governance is one of the most important issues for proper corporate management and is aggressively taking various
kinds of measures.
Also, in order to be trusted further by society and stakeholders, we disclose information quickly in fair and accurate manner prescribed in laws and regulations and actively disclose information that we concluded is beneficial to understand the Company. We willfurther enhance the transparency of the Company.

2. Corporate Governance System
With the Audit and Supervisory System as the basis, the Company is making efforts in strengthening the corporate governance system through initiatives including selection of highly independent Outside Directors, and establishment of Advisory Committee on selection of candidates for Directors and on remuneration, etc.
For details of the Company’s corporate governance system, please refer to the Corporate Governance Report.
http://www.globalsuzuki.com/ir/library/governance/pdf/report.pdf

General Meeting of Shareholders
Elects/Dismisses

Elects/Dismisses

Elects/Dismisses
Collaborates

AuditsBoard of Directors
8 Directors ( 2 of which are Outside Directors )Reports
Finds

Audit & Supervisory Board
5 Members

Secretariat
of Audit &Supervisory
Board

Consults
Reports

Advisory Committee
on Personnel andRemuneration, etc.

Accounting Auditor(3 of which are Outside Audit &Supervisory Board Members)

Reports

Audits accounts

Instructs

Presents /Reports

Supervises

Audit
Department

Collaborates

Instructs• Executive Committee• Meetings Relating toBusiness Operations
and Management

External
Attorneys

Corporate GovernanceCommittee

AuditsReports

Instructs

Consults
Reports

Promotes
complianceand riskmanagement

AuditsRisk Management Hotline(Internal reporting system)

Audits accounts

Headquarters / Group Companies— 15 —SUZUKI MOTOR CORPORATIONESG Information

Risks in Operations
Risks that may affect the management results, stock price and financial situation of the Group include the followings.
Forward-looking statements in this section are based on our conclusions as of the end of FY2017.

1. Risk relating to markets
n Change in economic situations, demand fluctuation in the markets

The long term economic slowdown, world economic deterioration and financial crisis, and the reduced buying motivation of the consumers may lead to a substantially reduced demand for the products of the Group including automobiles, motorcycles and outboard motors. They may also adversely affect the performance and financial conditions of the Group.
In addition, we conduct businesses around the world, and our dependency on the overseas manufacturing plants especially in theemerging countries of the Asian regions has been increasing over the years. The unexpected situation in these markets such as the rapidchange in the economic situations may adversely affect the performance and financial conditions of the Group. Further, unexpectedchange or new application of tax systems, financial policies and others in each country may also adversely affect the performance andfinancial conditions of the Group.
n Severer competitions with other companies

We are facing competitions with rival companies in every global market where we conduct our businesses. As the automobiles andmotorcycles industries in the world are globalised further, competitions may get harder. Competitions with other companies include
various aspects such as product quality, safety, price, environmental performance, as well as efficiency of product development andmanufacturing system, establishment of sales and service systems and sales finance.
We will make further efforts for maintaining and improving our competitive edges, but there may be risks that impede our competitive
advantages.

2. Risk relating to businessn New product development and launching abilities

It is very important for an automobile and motorcycle manufacturer to grasp correctly the customer needs and environment surroundingcars and to develop and launch to the market new attractive products that satisfy the customers in a timely manner. It has become more
important than ever to grasp the customer needs that rapidly change and environment surrounding cars, such as the reduced demands
caused by domestic and overseas economic slowdown, the increased interest in the environmental performance and the rapid spread ofcars loaded with advanced technology.
Besides, launching of new products will require abilities of specific product development, development capability of advanced technology
toward the future, and further abilities of continually manufacture products, in addition to appropriately understanding customer needs
and environment surrounding cars.
However, even if we are able to grasp correctly the customer needs and environment surrounding cars, we may not be able to develop
new products matching the customer needs in a timely manner on account of technical abilities, procurement of parts, production capabilities, securities of superior human resources and other factors. If we are unable to launch products matching the customer needs
to the market in a timely manner, the sales share and sales may be reduced, which may adversely affect the performance and financial
conditions of the Group.
n Change in product prices and purchase prices, dependence on specific suppliers

Various factors including insufficient supply or price rise of specific parts and raw materials, unstable economic conditions, revisions ofimport regulations and harder price competition may rapidly change the product prices and purchase prices of the Group. There is no
guarantee that such rapid price change does not last long or such change does not occur in the markets where there have not beensuch changes so far. Rapid changes in product prices and purchase prices may adversely affect the performance and financial positionsof the Group in any market where we conduct our businesses.
In addition, the procurement of some of the parts has been limited to specific suppliers on account of technical abilities, quality, andprice competitiveness. If we are unable to obtain the parts continuously and stably on account of unforeseeable accidents of the suppliers, it may adversely affect the performance and financial conditions of the Group.
n Business development in various countries in the world

We have been conducting our businesses in various countries in the world, and in some of the countries, we conduct joint ventures withlocal companies in accordance with local laws or other requirements. These businesses are restricted by various legal and other regulations in each country (including those related to tax, tariff, overseas investment and fund transfer to the home country). Any changes
to such regulations, or management policies or management environment of the joint venture partners may adversely affect the performance and financial conditions of the Group.
n Fluctuations of exchange rates and interest rates

We export automobiles, motorcycles, outboard motors and related parts to various countries in the world from Japan. In addition, we
export those products and parts from the overseas manufacturing plants to multiple other countries. The ratio of the overseas sales hasreached 70 percent of consolidated sales for the current consolidated fiscal year. As the Group depends heavily on the overseas manufacturing plants located mainly in emerging countries, it is susceptible to fluctuations in the foreign currencies. Also, since the Groupprocures a major part of fund in Japan where interest rates continue to be low, it is susceptible to changes in the interest rates.
We take hedging measures such as forward exchange contracts and decentralisation of production sites to optimise the production system globally to reduce the risks of exchange rates and interest rates fluctuations, but it is impossible to hedge every risk. The currencies
appreciation in main production countries against other currencies may adversely affect the performance and financial conditions of theGroup. On the other hand, by transferring production sites to other countries, it may result in opportunity losses that the Group can nolonger benefit from foreign exchange gain in export even when the currency of its local country weakens.
Further, rapid increase of interest rates in Japan may adversely affect the performance and financial conditions of the Group.
— 16 —SUZUKI MOTOR CORPORATIONESG Informationn Government regulations

Various legal regulations are applied to the automobiles, motorcycles and outboard motor industries in relation to the emission level ofemission gas, mileage, noises, safety and contaminated material emission level from the manufacturing plants. These regulations may berevised, in many cases strengthened. Expenses to comply with these regulations may largely affect the performance of the Group.
In addition, many governments determine the imposition of tariffs, price control regulations and exchange control regulations. The Groupis paying expenses to comply with these regulations and will expect to continue bearing them.
We may pay more expenses depending on the establishment of new laws or changes of existing laws. Further, unexpected changes or
new application of tax systems and economic measures of each country may adversely affect the performance and financial conditionsof the Group.
n Quality assurance

We place the top priority on the product safety and make efforts to establish the quality assurance system from development to sales.
We buy insurance for the product liability, but there are risks not covered by insurance. The occurrence of large expenses for a largescale recall to ensure safety of the customers may adversely affect the performance and financial conditions of the Group.
n Alliance with other companies

We conduct various alliance activities with automobile manufacturer around the world and other companies such as for research anddevelopment, manufacturing, sales and finance, but factors that cannot be controlled by the Group such as situations inherent to the alliance partners may adversely affect the performance and financial conditions of the Group.
n Dependency on information technology

We create, process and stock information in the form of electronic data in all areas of the business activities such as design and development, production, marketing and accounting. The Group’s products are also equipped with a variety of electronic control systems, which
control vehicles and mounted equipment. While safety measures have been taken on the said items, infrastructure failure such as power
shutoff and attacks by computer hacker and viruses may occur. If the group’s operation is interrupted, and data is destroyed or lost, andleakage of confidential information takes place, it may adversely affect the performance and financial conditions of the Group.
n Leakage of information

We have adopted a structure to prevent leakage of personal information of inside and outside of company and confidential information
related to the Group’s management, operation and technology, etc. But if such information is leaked or used without due authorisation
attributable to unexpected circumstances, the Group may be subject to legal demand, lawsuit, indemnity liability and obligation to pay afine, and this may adversely affect the performance and financial conditions of the Group.
n Compliance

We have established a compliance system to prevent violation of laws and regulations and respond quickly to various issues related tocompliance. Nevertheless, if we detect a fact of violation of laws or inappropriate response to compliance issues due to unexpectedcircumstances, the Group’s social credibility may be affected seriously, which may adversely affect the performance and financial conditions of the Group.
n Protection of intellectual property

We have stocked intellectual property such as technology and knowhow to distinguish its products with those of competitors, and havetaken measures to protect such property and to prevent infringement of intellectual property rights by a third party. Nonetheless, if theGroup’s intellectual property is infringed unlawfully, or if the Group is pointed out by a third party to have infringed intellectual property
rights and faces lawsuit or asked to terminate manufacturing and marketing of its products and to pay indemnity, it may adversely affectthe performance and financial conditions of the Group.
n Legal proceedings

We may become a party to lawsuits and other legal proceedings in the course of our business activities. In the case where any judgments
disadvantageous to us are made in such legal proceedings, it may adversely affect the performance and financial conditions of the Group.
n Influences of natural disasters, epidemics, wars, terrorism and strikes, etc.

In Japan, we are exposed to a variety of risks such as natural disasters including earthquake, typhoon and flood and unexpected accident. Especially, the Group’s major facilities including head office, R&D sites and major manufacturing plants are concentrated in the
Tokai region where occurrence of periodic massive earthquakes is highly probable.
We have taken various preventive measurements such as quake-resistant measures for buildings and facilities, fire preventive measures,
establishment of BCP (Business Continuity Plan), purchases of earthquake insurances and others to minimise the influences of damage
by natural disasters such as Tokai and Tonankai Earthquake. But, occurrences of any Tokai and Tonankai Earthquake may adversely affectthe performance and financial condition of the Group largely.
We also conduct businesses around the world and are exposed to number of risks relating to our overseas operations. These risks
around the world are natural disasters, epidemics, wars, terrorism, strikes, and various matters attributable to unstable political and social
situation and difficulties, etc. These unexpected events may delay or suspend the purchase of raw materials and parts, manufacturing,sales of products, and provision of logistics and services. If such delay or suspension caused by any of these factors occur or prolong, it
may adversely affect the performance and financial conditions of the Group.
Further, there are various risks other than those mentioned above, and what have been stated in this section does not represent all therisks of the Group.
— 17 —SUZUKI MOTOR CORPORATION