ANNUAL REPORT2017

Contents
Mission Statement___________________________________________________________ 1
A Message from the Management_____________________________________________ 2
New Mid-Term Management Plan SUZUKI NEXT 100______________________________ 4
Financial Highlights__________________________________________________________ 6
Year in Review_______________________________________________________________ 8
Automobiles_____________________________________________________________ 8
Motorcycles_____________________________________________________________ 10
Marine Products_________________________________________________________ 12
Environmental Initiatives_________________________________________________ 13
Topics_____________________________________________________________________ 14
Directors, Auditors and Officers______________________________________________ 18
Corporate Governance Issues________________________________________________ 19
Risks in Operations_________________________________________________________ 20
The Status of the Corporate Group____________________________________________ 22
Financial Section___________________________________________________________ 24
Company Outline___________________________________________________________ 52

Mission Statement
1.Develop products of superior value by focussing on the customer
2.Establish a refreshing and innovative company through teamwork
3.Strive for individual excellence through continuous improvementSUZUKI MOTOR CORPORATION 1

A Message from the Management

A Message from the Management
Thank you very much for your continued support.
We would like to begin by addressing the improper activities inregards to fuel consumption and gas emission testing of the Company’s automobiles last year, which caused unfortunate worry
among our stakeholders. As a result of testing by the Ministry ofLand, Infrastructure, Transport and Tourism (MLIT), it was confirmedthat there were no problems with the Company’s original values forfuel consumption (fuel consumption values listed in catalogues)
and original values for gas emission. The Company has taken swift
action to implement reliable measures for preventing recurrenceof the incident. All executives and employees of the Company willcontinue to implement thorough compliance in order to maintain
trust and meet the expectations of shareholders.

Management results of FY2016
With respect to the management environment of the Group for
FY2016, the economy is recovering moderately as a whole. On theother hand, there are concerns about the influence of the policyof US administration, uncertainties about trend of Europe including
the issue of the UK leaving the EU, prospects for the economy ofdeveloping countries, and others. In India, an important market for
the Group, the economy is expanding mainly owing to increase ofdomestic consumption. Also in Japan, the economy is recoveringmoderately on the back of various measures introduced by the government.
Under these circumstances, the consolidated net sales of the fiscal
year (April 2016 to March 2017) decreased by ¥11.2 billion (0.3%) to¥3,169.5 billion compared to the previous fiscal year. The Japanese
domestic net sales decreased by ¥10.4 billion (1.0%) to ¥1,037.5
billion year-on-year mainly owing to decrease in mini vehicle andOEM sales, despite increase in compact vehicle sales. The overseas
net sales were flat on the year at ¥2,132.0 billion mainly owing todecrease in automobile sales in Indonesia and Pakistan, and theimpact of the exchange rate, despite increase in automobile sales inareas including India and Europe.
In terms of the consolidated income, although there were impactof the exchange rate, the operating income increased by ¥71.4
billion (36.5%) to ¥266.7 billion year-on-year mainly owing to increase in automobile sales in India and Europe. The net income attributable to owners of the parent increased by ¥43.3 billion (37.1%)
to ¥160.0 billion year-on-year partly owing to increase in gain on
sales of investment securities, in addition to increase in the ordinary income, despite accounting impairment loss of ¥39.9 billion
for businesses including the automobile business in Thailand as
extraordinary losses.

2 SUZUKI MOTOR CORPORATION

Basic policies for profit distribution
Under the New Mid-Term Management Plan (from FY2015 to
FY2019) SUZUKI NEXT 100, the Company plans active investments
for future growth, which includes accumulated capital investmentof 1 trillion yen and research and development expenses of 200
billion yen for FY2019. At the moment, the Company prioritises investment for growth centred in India, and set the dividend payout
ratio target to 15% or more.
Also, partly because of large acquisition of treasury shares in theprevious fiscal year, shareholder’s equity ratio declined to 35.4% at
the end of the previous fiscal year, and the improvement of shareholder’s equity ratio is becoming an urgent issue. Meanwhile, theCompany also recognises that capital efficiency and shareholder
return are significant management issue as well.
Taking the above-mentioned condition into consideration, as withthe previous fiscal year, the Company would utilise the gain on
sales of investment securities for investment for growth and improvement of shareholder’s equity ratio, and made the year-end
dividends based on the net income attributable to owners of theparent excluding the gain on sales of investment securities, whichwas ¥27.00 per share, up by ¥10.00 per share from the previous
fiscal year.
As a result, the annual dividends including interim dividends was¥44.00 per share and up by ¥12.00 per share from the previous
fiscal year. Dividend payout ratio based on the net income attributable to shareholders of the parent excluding the gain on salesof investment securities is 15.2%.

Outstanding issues
The Group has established the New Mid-Term Management PlanSUZUKI NEXT 100 - Strengthening of its management base toward
the 100th anniversary of foundation and the next 100 years -, afive-year plan from 2015.
FY2016 marked the second year of the New Mid-Term Management Plan. The Company is making steady progress for achieving
the 2019 fiscal year goals of 3,700 billion yen and maintaining an
operating income margin of 7%.
Also, due to changes in the environment surrounding automobiles
and to increasingly severe market competition, it has become
necessary to focus on R&D for environmental performance andsafety, and on growth investment with a focus on India. Amidst
such conditions, the Company is addressing the following issues
in order to achieve the New Mid-Term Management Plan.

A Message from the Managementn Compliance
In response to the discovery of improper activities that were inconsistent with national regulations with regards to fuel consumption and gas emission testing of the Company’s automobiles, theCompany immediately implemented measures which included
strengthening the legal education and compliance training, clarifying the responsibility of certification duties, strengthening internal
check systems, etc. The entire Company shall continue to work tostrengthen compliance.
n Quality
The Company will make the customers’ safety and security its toppriority, develop and produce high-quality products which the customers can use securely, and provide after services. In the future,
while accurately ascertaining the quality needs of customers, theCompany will maintain a high level of quality awareness in all departments and will continue to make the utmost effort to ensure
the safety and security of customers.
n Products and R&D
Today, all corporations are expected to consider the environment.
In the automotive industry, there is the need for environmental
technology, low fuel consumption technology, etc. The environment surrounding automobiles continues to change. In addition
to safety technology, it is now necessary to implement IT technology, etc. The Group will continue to provide products which arerequired by customers and which can be used safely and securely.
n Production
Domestically, the Group shall work to obtain personnel necessary
for achieving production plans.
Globally, while strengthening education, installation of safety facilities, etc. necessary for achieving “Safety First” factories, theGroup shall work to improve product quality and to construct an
optimal global production system.
n Automobile BusinessIn the domestic automobile market, the Company succeeded inselling 100,000 standard and small vehicles for the first time ever.
In response to strong demand in India, new Gujarat Plant began
operation.
Furthermore, we are planning the constructing of Gujarat Plant No.
2 and the Engine & Transmission Plant with the aim of beginning
operation in 2019. In addition to further strengthening the domestic automobile business and Indian automobile business which
are the two pillars of the Group, we will strengthen our automobile
business in regions such as ASEAN, Europe, and Pakistan. This will
enable us to diversify our income sources and to carry forward
the ALL GRIP structure reformation.

n Motorcycle Business
While focussing on the 150cc and up, backbone, and sport categories, the Group will strengthen the consistency of the Suzuki
brand by ranging the series from large engine displacement motorcycles to small engine displacement motorcycles. In the fiscal
year, the Group focussed on reducing fixed expenses and reducing
costs. New models including the GSX-R1000 and GSX-R150 werereleased at the end of the year. Moving forward, in addition to promoting sales of these new models, the Group will achieve a profitable structure through management reforms.
n Outboard Motor BusinessIn addition to focussing on strengthening sales in the American
market, the Group will proceed the development of the Asian market and make “THE ULTIMATE 4-STROKE OUTBOARD” its new brandslogan and aim at creating the world top 4-STROKE outboard motors brand.
n Environment & Social Activities
In the fiscal year, the Company continued to engage in various
social service activities for environmental conservation in close
cooperation with the local community, as well as to promote oursolar energy project in order to suppress global warming and tosupport disaster affected areas.
In addition, the Company is engaged in the research promotion
and the scholarship assistance through Suzuki Foundation and Suzuki Education and Culture Foundation. In the future, the Company
shall actively address human rights issues which are becoming increasingly prevalent internationally, and shall work to address thedomestic issue of reforming work styles.
By balancing between investments for growth and strengtheningof its management base, the Group will consistently promote efforts for enhancing corporate value.
For the details of Mid-Term Management Plan SUZUKI NEXT 100,
please refer to the next page.
The Group has entered the third year of the New Mid-Term Management Plan (FY2015 to 2019) SUZUKI NEXT 100. Aiming for new
growth, Team Suzuki will respond to rapid changes in the automotive manufacturing environment and will strive to constantly create products and provide services with outstanding value.
We look forward to the continued support and encouragement of
our shareholders.

Representative Director and President
Toshihiro Suzuki

SUZUKI MOTOR CORPORATION 3

New Mid-Term Management Plan SUZUKI NEXT 100

New Mid-Term Management Plan SUZUKI NEXT 100~ Strengthening of management base toward
the 100th anniversary of foundation and the next 100 years ~Suzuki Motor Corporation has established the New Mid-Term Management Plan SUZUKI NEXT 100, a five-year plan from 2015.
The Suzuki Group will be celebrating its 100th anniversary of foundation in 2020. In order for the Group to continuously
grow for the next 100 years, Suzuki will put efforts into strengthening of management base by positioning the next five
years as the period to stabilise the foundation of management. The Group will tackle as Team Suzuki to globally develop
manufacturing base and overhaul working procedure.
Under the New Mid-Term Management Plan, the Group will unite as one to enhance corporate value and aim for sustainable growth.
Overview of the New Mid-Term Management Plan SUZUKI NEXT 100 is as per below.

Basic Policy
By returning to the origin of “Develop products of superior value by focussing on the customer” as mentioned in the first paragraph of the mission statement, Suzuki will strengthen its business base.

Strengthening of Manufacturing

Team SUZUKI
Reformation of Business Culture
Development of Human Resources

Top Priority on Quality● Safety and reliance of customers● Customer-firstis the top priority● Proposal-based challenging management● Swiftly correspond to customer’s● Development of human resources

who can take action by thinking smarter● Arrangement of environment for
motivating employees

Globalisation● Establishment of new

management structure● Strengthening of global
management

Customerfocussed

Take action with Customerfocussed mind in all aspects
in line with the spiritof the mission
statement

Stable Management Base
● Diversification of Source

voice● Making of reliable brandof Profit● Enhancement of Corporate
Value● Strengthening of Risk
Management

Creative Products● Creation of value that exceed

customer’s expectation● Offer driving pleasure, fun touse, and pride of ownership

Engineering, Production
and Purchasing● Driving Performance and Fuel Efficiency

Safety and Reliability● Evolution of manufacturing engineering● Construction of global optimum

production structure● Promotion of optimum procurement

and internal production

4 SUZUKI MOTOR CORPORATIONNew Mid-Term Management Plan SUZUKI NEXT 100

Suzuki’s Business Strategy
1. Automobile Businessn Product Strategy

n Regional Strategy

Efficient Development

Centred in Japan and India, Asia is the main region

Consolidation ofPassenger Platform
Concentration of
Development ofPetrol Engine

New development will be consolidated into three new lightweight platform of Mini,A, and B
l Inter-segment use of common functional parts through modularisation

Maintain market and employment by placing
as the base of development and production
Constantly introduce mini and compact models every yearl Minicar share of more than 30%, compact car
sales of more than 100,000 unitsl Strengthen direct sales and expansion of distributor base

l

l

l

l

Japan

Efficiently develop basic and new technologies by concentrating on 660 to 1,400cc

Other than petrol engine technologies, put efforts into technologies which also consider the needs of emerging countries such as AGS, ISG, and infotainmentl Development of human resources and making of long-term base by co-developingwith Indian engineerslDevelopmentwith Global Sight
Global Optimum
ProductionlMake Japan, India, Indonesia, Thailand, and Hungary as global production base

While still centreing on the expanding new buyers, fulfil products, sales network, and productivity to meet increasing substitute demands
l Passenger share of more than 45%
l

India

Model Introduction PlanlIntroduce 20 new models globally in five years

ASEAN

MinicarA Segment
B Segment
C Segment
SUV

EuropeConstantly introduce one model every year (five models in five years)
Expand sales by introducing six models in five yearslIntroduce three models in each segment, a total of nine models in five years

Develop Indonesia and Thailand as pillars that
follow Japan and India, to place them as the
production base for inside and outside ASEAN
Brush up advanced technologies and productcompetitiveness through corresponding to fuelefficiency restriction, safety technologies, anddesign2. Motorcycle Businessn Enhancing Earning Strength and Brand Valuel Departure from chronic deficits through selection and concentration.
l Development of products which clearly define characteristics of Suzuki (150cc and up, backbone, sport)
Main Category and Product Development

Marketing Strategy

Main Category
150cc and up Backbone Sport(Shift from low-priced to mid- to high-priced products)

High quality service

l

l

l
l
l

l

l

Improve customer satisfaction

Developed Strengthen announcement activities of events, etc.
Improve profitability
Countries Strengthen sales of parts and accessories

Return to the origin of basic performances of “Running, Cornering, and Braking”
Pursue fun-to-ride and easy-to-ride
Feedback of MotoGP technologies

Emerging
Countries

Strengthen business base
Consolidate production base in ASEAN
Improve profitability
Develop sales network of large displacement model

3. Outboard Motor Business
Product Strategyll

New Brand Slogan

Expand lineup of large four-stroke outboard motors
Introduce more than six models in five years

THE ULTIMATE
4-STROKE OUTBOARD

Regional Strategyll

Aim for the world’s best four-stroke outboard motor brand

Focus on strengthening sales in the US
Development of Asian market

Mid-Term Management Target

Mid-Term Management Target Value

Operating Income Margin
Shareholder
ReturnFY2017
Disclosed ValueFY2019Target¥3,169.5 billion¥3,400.0 billion¥3,700.0 billion

8.4%

7.1%

7.0%

ROE

15.4%

—

Dividend
payout ratio

12.1%(¥44.00 per share)

more than 15%¥131.5 billion¥150.0 billion¥200.0 billion(Total capital expenditures for five years)(¥1,000 billion)

R&D expenses

8-10%* Foreign exchange rates…¥105/US$, ¥120/Euro, ¥1.60/Indian Rupee, ¥0.80/100 Indonesian Rupiah, ¥3.00/ThaiBaht.

FY2016
ResultMotorcycle

Consolidated Net Sales

FY2016
ResultGlobal Sales Units

Automobile

As for the consolidated net sales, Suzuki will aim to promptly exceed its highest-ever marked in FY2007 (¥3,502.4 billion) by steadily
increasing.
By balancing between investments for growth and strengtheningof management base, Suzuki will consistently promote efforts forenhancing corporate value.

FY2017
Disclosed ValueFY2019TargetJapan

639,000

645,000

Europe245,000

267,000

700,000
280,000

Asia

1,870,000

1,983,000

2,200,000

Others164,000

176,000

220,000

Total

2,918,000

3,071,000

3,400,000

Japan

62,00067,00070,000Europe45,00053,00070,000

North America

32,00040,00060,0001,039,000

1,073,000

1,500,000

Asia
Others190,000

186,000

300,000

Total

1,367,000

1,419,000

2,000,000* The targets and forward-looking statements mentioned in this document are based on
currently available information and assumptions, contain risks and uncertainty and do notconstitute guarantees of future achievement.
* Please note that the future results may greatly vary by the changes of various factors.
Those factors, which may influence the future results, include economic conditions andthe trend of demand in major markets and the fluctuations of foreign exchange rates(mainly U.S. dollar/Yen rate, Euro/Yen rate, Indian Rupee/Yen rate).

SUZUKI MOTOR CORPORATION 5

Financial Highlights

Financial Highlights

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

Asia

Europe3,015,461
2,938,314
268,325

229,693

169,891

North America

Others3,180,659

3,169,542

266,329

257,585

67,002

56,115

Automobile

404,722

Marine & Power Products

3,180,659

3,169,542

68,253

67,633233,889

206,2892,878,515

2,895,619

2016

2017

3,015,461
2,938,314

63,03356,046
250,485
2,578,317

425,332

50,212372,028

398,902

Motorcycle

266,60265,97665,084

2,578,317

n Net sales by segment (Millions of yen)

230,290

95,552
286,524

1,111,900

1,214,519

1,394,720

1,392,961

985,3992,615,664

2,701,942

2,297,814

1,040,948

1,132,732

1,094,611

1,047,883

1,037,546

2014

2015

2016

2017

2013

n Operating income (Millions of yen)

2013

n Net income attributable toowners of the parent

Operating income

2014

2015

n Dividends (Yen)
Year-end dividends

Net income (Millions of yen)
Net income per share (Yen)

Margin266,685

Interim dividends
Dividend payout ratio
Dividend payout ratio (excl.gain on
sales of investment securities)

159,956

17.3%
15.6%
187,747

116,660

195,308362.54

107,484

179,424

12.6%

15.2%
13.6%

12.5%

12.1%

96,862
144,564
8.4%
6.4%
5.6%

6.0%

44

80,389234.98191.606.1%

32172.6724

143.31
18

14

27

27
17
17

10

2013

2014

2015

6 SUZUKI MOTOR CORPORATION

2016

2017

2013

2014

2015

2016

2017

8

10

10

2013

2014

2015

15

17

2016

2017

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

119,269

198,782

194,457

171,535
168,315

169,289ROE

131,539
127,090 125,897 131,031
15.4%

163,397

4.6%

134,377

4.3%

4.2%

4.2%

4.1%

117,188
93,680

2013

2014

2015

2016

2017

2013

n Total assets/Net assets/Shareholders' equity ratio

			

2014

2015

2016

2017

Net assets
3,252,800

2,487,635
46.1%

46.2%

2014

294,095

255,037
134,128

45.6%
35.9%

1,494,357

2,809

84,47289,505-20,502 -33,632

1,387,041

1,298,553

77,751

51,66036,356
1,701,390

1,187,703-120,909-210,559-242,435-288,564-286,559

2013

2014

2015

2016

2017

-520,361

2013

n Automobile production(Thousand units)

3,043
2,878 2,857

n Automobile sales

2014

2015

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

2016

2017

n Motorcycle sales(ATV included)

2,867 2,861 2,918

Overseas
2,312

2,269
2,033

1,988
2,090

2,203
1,992 1,981

2,111

Japan
2,022

1,799

1,766

2,231 2,279
1,480

2,100

1,501
1,367

1,370
2,236

1,852

1,948

1,645

1,699

1,358 1,229
1,044

998

1,055

(Thousand units)

3,074
2,951
2,664 2,709

1,834 1,859

2017

366,315

322,915
190,057

35.4%

2016

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

3,115,985
2,702,008

2015

n Cash flows (Millions of yen)

Shareholder’s equity ratio

2,874,074

6.9%

2013

(Millions of yen)
Total assets

9.6%

8.7%

7.5%

861

871

672

728

756

630

1,305

639
169

2013 2014 2015 2016 2017

1,440

2013 2014 2015 2016 2017

180

154

122

141

2013 2014 2015 2016 2017

76

74

67

61

62

2013 2014 2015 2016 2017

SUZUKI MOTOR CORPORATION 7

Year in Review

Year in Review
Automobiles
Years ended 31 Marchn Production units
2016

n Sales units

2017

1,585

(Thousand units)

n Operating results of automobile business2016(Thousand units)

2017
1,445

Segment profit
Margin

1,926
871
426
245

203
Europe

India

8.8％

6.7％

639
414

Japan

(100 million yen)

2,551

Asia

Japan

Europe

164
India

Asia

Others2016

2017

Suzuki’s Worldwide Manufacturing and Sales
Total overseas automobile production for FY2016 increased by 5.4% year-on-year to 2,203,000 units. Worldwide production, including Japan,
also increased by 4.2% year-on-year to 3,074,000 units.
Sales of automobiles in overseas market increased by 2.2% year-on-year to 2,279,000 units, while total global sales, including Japan, also increased by 2.0% year-on-year to 2,918,000 units.

Operating Results by Segment
In the automobile business, the operating income increased by ¥62.5 billion (32.4%) to ¥255.1 billion year-on-year mainly owing to improvement in sales and model mix in Japan, India, and Europe.

Japanese Market
1. Overview of the Japanese Automobile Market
Total domestic automobile sales volume in FY2016 rose by 3% year-on-year to 5,078,000 units. It recovered above five million units for the
first time in two fiscal years. Sales of standard and small vehicles rose by 8% year-on-year to 3,358,000 units, while sales of minivehicles fell
for the second consecutive fiscal year by 5% year-on-year to 1,720,000 units, owing partly to the impact of improper fuel consumption in
April 2016.

2. Suzuki Sales
Suzuki’s domestic automobile sales in FY2016 grew by 1% year-on-year to 639,000 units. Though Suzuki’s sales of minivehicles fell for thesecond consecutive fiscal year by 3% year-on-year to 532,000 units, its market share grew from 30.3% in the previous fiscal year to 30.9%.
Suzuki’s sales of standard and small vehicles rose for the second consecutive fiscal year by 32% year-on-year to 107,000 units. The key drivers of that growth were Solio launched in November 2016 equipped with newly-developed hybrid system, and the all-new Swift launched in
December 2016. Owing to sales contribution of these two models, the company achieved standard and small vehicle sales target of 100,000
units for the first time.

3. Suzuki Topics in FY2016• Compact crossover Ignis was awarded the 2016 Good Design Award in September 2016.
• Alto minicar achieved accumulated domestic sales of five million units in December 2016.

8 SUZUKI MOTOR CORPORATION

Solio Hybrid(launched in November 2016)

Spacia CustomZ(launched in December 2016)

Swift(launched in January 2017)

WagonR(launched in February 2017)

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 grew in FY2016 by 8% year-on-year to 3,761,000 units, whilesales of passenger cars grew in Europe by 5% year-on-year to 17,898,000 units, and in China by 15% year-on-year to 24,578,000 units.
As for other countries and areas, new car sales in Indonesia grew by 3% year-on-year to 1,064,000 units, Thailand grew by 2% year-on-year
to 797,000 units, Pakistan fell by 5% year-on-year to 210,000 units, Oceania in total grew by 2% year-on-year to 1,347,000 units, Latin America in total grew by 1% year-on-year to 5,665,000 units, the Middle East in total fell by 15% year-on-year to 2,426,000 units, and Africa in total
fell by 16% year-on-year to 1,233,000 units.

2. Suzuki Sales
Suzuki’s overseas automobile sales volume in FY2016 grew by 2% year-on-year to 2,279,000 units. Suzuki’s sales in India rose by 11% yearon-year to a record-high 1,445,000 units owing mainly to strong demand for models including the Baleno and the Vitara Brezza. Suzuki’s
sales in Europe grew by 18% year-on-year to 245,000 units owing to launching of new models, the Baleno and the Ignis, in addition to strong
demand for the Vitara. Suzuki’s sales in China fell by 20% year-on-year to 148,000 units.
As for other countries and areas, Suzuki’s sales in Indonesia fell by 23% year-on-year to 92,000 units, Thailand grew by 8% year-on-year
to 23,000 units, Pakistan fell by 15% year-on-year to 113,000 units, other Asian countries in total fell by 34% year-on-year to 50,000 units,
Oceania in total grew by 6% year-on-year to 26,000 units, Latin America in total grew by 2% year-on-year to 103,000 units, the Middle East in
total fell by 10% year-on-year to 13,000 units, and Africa in total fell by 47% year-on-year to 23,000 units.

3. Suzuki Topics in FY2016• Swift achieved accumulated global sales of five million units in April 2016.
• Suzuki entered in light commercial vehicle segment in India by launching the Super Carry light truck in July 2016.
• Ignis made its European premiere at the Paris Motor Show in September 2016, and its sales started for the overseas market, subsequently.
The Ignis was selected as a finalist for the 2017 World Urban Car category at the World Car Awards in March 2017.
• Vitara Brezza won the Indian Car of the Year (ICOTY) 2017 in December 2016.

Super Carry (launched in India in July 2017)

Ignis (unveiled in Europe in September 2016)SUZUKI MOTOR CORPORATION 9

Year in Review

Motorcycles
Years ended 31 Marchn Production units (ATV included)
2016(Thousand units)

2017

n Operating results of motorcycle businessn Sales units (ATV included)

1,162

2016

(Thousand units)

2017

Segment loss

(100 million yen)

1,039

-9
141
Japan

63

62

45

32

OthersJapan

EuropeAmerica

4
America

Asia

190
Asia

Others

-102
2016

2017

Suzuki’s Worldwide Manufacturing and Sales
Total overseas motorcycle production (including ATVs) in FY2016 decreased by 9.4% year-on-year to 1,229,000 units. Worldwide
production, including production in Japan, also decreased by 7.4% year-on-year to 1,370,000 units.
Sales of motorcycles (including ATVs) in overseas market decreased by 9.3% year-on-year to 1,305,000 units, while total global sales,
including Japan, also decreased by 8.9% year-on-year to 1,367,000 units.

Operating Results by Segment
In the motorcycle business, the operating loss of ¥10.2 billion in the previous fiscal year improved to an operating loss of ¥0.9 billion
owing to reduction of expenses such as sundry expenses, despite the impact of the exchange rate.

Japanese Market
1. Overview of Japanese Motorcycle Market
The total domestic motorcycle sales (factory shipments) of the four Japanese manufacturers in FY2016 fell by 6% year-on-year to 341,000
units. Sales of models with engine displacements of 126cm3 and higher were down 10% year-on-year at 75,000 units. Sales of models withengine displacements up to 125cm3 were down 5% year-on-year at 266,000 units. In addition to aging of users and decrease in younger
population, which is a structural concern of poor demand in the domestic market, the cause of decline is assumed to be a decrease in production of models with engine displacements up to 125cm3, which was impacted by the 2016 Kumamoto Earthquake, and less than average
number of launches of new models with engine displacements of 126cm3 and higher.

2. Suzuki Sales
Suzuki’s domestic sales (factory shipments) in FY2016 grew by 3% year-on-year to 60,000 units. Sales of models with engine displacementsof 126cm3 and higher fell by 2% year-on-year to 8,000 units. Sales of models with engine displacements up to 125cm3 rose by 4% year-onyear to 52,000 units. Although models with engine displacements between 126cm3 and 250cm3 grew by 8% to 4,262 units owing to launchof new model GIXXER, models with engine displacements of 251cm3 and higher fell by 11% to 3,545 units. Models with engine displacements
up to 125cm3 increased year-on-year owing to strong sales of the Let’s series.

3. Suzuki Topics in FY2016• The all-new SV650 ABS, a sportbike with 650cm3 V-twin engine was launched in August 2016.
• GIXXER, a 150cm3 sportbike favoured in the overseas market was launched in January 2017.
• New 750cm3 model GSX-S750 ABS was launched in March 2017.

SV650 ABS (launched in August 2016)

10 SUZUKI MOTOR CORPORATIONGIXXER (launched in January 2017)

GSX-S750 ABS (launched in March 2017)

Year in Review

Overseas Markets
1. Overview of Suzuki’s Main Overseas Motorcycle Markets
Sales of motorcycles in Europe in FY2016 grew by 10% year-on-year to 1,041,000 units. Sales of motorcycles (including ATVs) in North America declined by 4% year-on-year to 791,000 units.
Sales in the six key ASEAN countries (Indonesia, Thailand, Vietnam, the Philippines, Malaysia, and Cambodia) were flat on the year at
12,519,000 units. Sales in China fell by 9% year-on-year to 7,976,000 units. Sales in India grew by 7% year-on-year to 17,587,000 units.

2. Suzuki Sales
Suzuki’s overseas motorcycle sales in FY2016 declined by 9% year-on-year to 1,305,000 units.
Sales declined in Europe by 6% year-on-year to 45,000 units, North America by 30% year-on-year to 32,000 units.
Sales in the six key ASEAN countries fell by 13% year-on-year to 265,000 units owing mainly to a drop in sales in Indonesia. Sales in China
also fell by 21% year-on-year to 359,000 units. Sales in India grew by 12% year-on-year to 351,000 units.

3. Suzuki Topics in FY2016• Five new models (GSX-R1000/R, GSX-S750, V-Strom 650/XT, V-Strom 1000/XT, and GSX-R125) for 2017 were unveiled at the Intermot heldin Cologne, Germany in October 2016, and four more models (GSX-S125, GSX250R, V-Strom 250, and BURGMAN 400) were unveiled at the
Milan Show held in Milan, Italy in November 2016.
• Two new models (GSX-R150 and GSX-S150) for the ASEAN region were unveiled at the Indonesia Motorcycle Show held in Jakarta, Indonesia in November 2016.
• In its second season after returning to the world’s premier motorcycle racing MotoGP, Suzuki made four podium appearances including a
win at the British MotoGP Round 12, finishing fourth overall for the 2016 season. Also, Suzuki Endurance Racing Team, an endurance teamof a subsidiary Suzuki France that participates with the supersport bike GSX-R1000, achieved its second consecutive, 15th title of the World
Endurance Championship.

GSX-R1000R (unveiled for overseas market in October 2016)

V-Strom 1000XT ABS (unveiled for overseas market in October 2016)

GSX250R ABS (unveiled for overseas market in November 2016)

GSX-R150 ABS (launched in Indonesia in November 2016)SUZUKI MOTOR CORPORATION 11

Year in Review

Marine Productsn Operating results of marine and power products, etc. business
Years ended 31 March

Segment profit(100 million yen)Margin

129

125

18.9％

18.5％

2016

2017

Operating Results by Segment
In the marine and power products, etc. business, the net sales decreased by ¥0.7 billion (0.9%) to ¥67.6 billion year-on-year mainly owing to theimpact of the exchange rate, despite increase in the sales of the outboard motors in North America. The operating income decreased by ¥0.4
billion (2.6%) to ¥12.5 billion year-on-year.

Overview of Marine Products
Suzuki’s domestic outboard motor sales in FY2016 rose by 4% year-on-year in volume and in net terms.
Suzuki’s export sales surged by 5% year-on-year in volume terms and by 1% year-on-year in net terms. Shift in demand toward larger models
and strong sales in countries including the United States covered the negative impact of the foreign exchange rate.
Suzuki’s four-stroke outboard motors range from the DF2 (the lowest-power model, which delivers 1.49kW/2PS) to the DF350 (the highest-power model, which delivers 257.4kW/350PS). The Company produces small models in Thailand and larger models at the Toyokawa Plant in Japan.

Suzuki Topics in FY2016• New black colour was introduced for the first time in 20 years for Suzuki outboard models. Graphic was also renewed, making it a more
stylish design while keeping the image of Suzuki outboard which has a history of more than 50 years.
• New large outboard models DF175AP and DF150AP were unveiled in September 2016. They received Top Products award by the Boating
Industry, a leading marine magazine in the United States. They became the third Suzuki outboard models to win the award.

DF175AP(unveiled in September 2016)

12 SUZUKI MOTOR CORPORATION

Year in Review

Environmental Initiatives
As a manufacturer of automobiles, motorcycles, outboard motors, and other items, Suzuki acts inconsideration 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 clean-energy vehicles, and reducing noise. In manufacturing, our efforts include reducing environmental risk, reducing energy requirements, and promoting the use ofalternative energy sources. In distribution, we focus on improving the operational efficiency and energy efficiency of transportation and on promoting the three Rs (reducing, reusing, and recycling). 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 and green purchasing in our offices, give our workers environmental education, and support social action programs in local communities.

SUZUKI CSR & ENVIRONMENTALREPORT 2016

Suzuki Topics in FY2016• Suzuki published “Suzuki CSR & Environmental Report 2016”. The Company has published a report about its
environmental initiatives every year since FY1999.
• Burgman Fuel Cell, a fuel cell scooter with a vehicle type approval, was registered and it received a license
plate in March 2017. Riding on public roads to verify market potential of fuel cell motorcycle has started.
• New models of Solio/Solio Bandit compact cars equipped with newly-developed hybrid system wereintroduced in Japan. Also, full model change of Suzuki’s main automobile models, Swift compact car andWagonR/WagonR Stingray minicars equipped with mild hybrid system were launched in Japan.

Solio Hybrid (launched in November 2016)

Swift (launched in January 2017)

Burgman Fuel Cell

WagonR (launched in February 2017)

Sales units of models equipped with hybrid system (Thousand units)
FY2015FY2016
Global automobile sales units Global automobile sales units
Of whichhybrids

Of whichhybrids

Japan

630

202

639

287

India

1,305

46

1,445

85

Others

926

1

835

17

Total

2,861

249

2,918

389

OthersIndia
Japan
Ratio of hybrids
in global sales* Hybrids include mild hybrid, S-ENE CHARGE, and SHVS.
* Hybrid sales units of Others are units exported from Japan and India.

Models equipped with hybrid system
WagonR/WagonR Stingray, Hustler, Spacia/Spacia Custom, Solio/Solio Bandit, Swift, Baleno, Ignis, Ciaz, and Ertiga* Depending on the market, there are models that are not equipped with hybrid system.

SUZUKI MOTOR CORPORATION 13

Topics

TopicsApril 2016
Suzuki Makinohara Solar Power Plant completed
Suzuki Makinohara Solar Power Plant, a 20MW (megawatt) solar
power facility that has been under construction and conducting
test operations since 2015, has been completed.
Combined with the 0.9MW power facility installed in the Hamamatsu Plant at Miyakoda-cho, Kita-ku, Hamamatsu and the 4MW
power plant at Maisaka-cho, Nishi-ku, Hamamatsu, this brings thetotal installed capacity of the Suzuki Group’s solar power facilities
to approximately 25MW. We estimate the CO2 emission reduction
effect of operating these solar power facilities to be about 10% of
Suzuki’s domestic plant CO2 emissions for FY2015. By contributing
regionally through power generation projects and promoting local
production for local consumption, the Suzuki Group will reinforce
its efforts to curb climate change and conserve the environment.

September 2016
Suzuki unveils new DF175AP/DF150AP
outboard motors
Suzuki unveiled its new DF175AP and
DF150AP outboard motors at the Genoa International Boat Show in Italy.
These outboard motors adopt Suzuki Selective Rotation technology enabling switching
between regular and reverse propeller direction, a world-first in this engine class*.
Under the brand slogan “The Ultimate
4-Stroke Outboard - Aiming to be theworld’s No. 1 brand in 4-stroke outboards”,
Suzuki Motor Corporation is addressing
customer needs in the global market with amodel lineup that demonstrates high output
and excellent fuel efficiency, from the portable DF2 to the powerful DF350A.
* Between 150-175 HP class. Based on Suzuki’s
research.

DF175AP

October 2016

Suzuki Makinohara Solar Power Plant

July 2016
Suzuki Education and Culture Foundation selects
scholarship students for FY2016
The Suzuki Education and Culture Foundation offers non-repayable
scholarships to high school students in Shizuoka prefecture, or university students who graduated from high school in Shizuoka prefecture, who are keen to learn but unable to focus on their studies
for financial reasons.
In FY2016, the foundation decided to provide scholarships to 20
new high school students and 3 new university students, in addition to the 32 high school students and 10 university students it
has been supporting since the previous year. This brings the total
number of students supported over the last 16 years to 295 and thetotal amount of support to ¥232.5 million.
The activities of the Suzuki Education and Culture Foundation are
aimed at contributing to young people’s healthy development
and international exchanges by providing financial assistance forschoolchildren and university students and supporting sports andlearning activities for youngsters and schools for foreigners, etc.

Suzuki and Toyota begin exploring business
partnership, sign memOrandum
Suzuki and Toyota Motor Corporation announced on 12 October,2016 that the two companies would start discussions leading toward a collaborative partnership.
They later signed a memorandum of agreement on 6 February, 2017
stating both companies’ intention to contribute to the resolution ofsocial issues and the healthy and sustainable development of theautomobile society.
They are considering how to achieve future partnerships in areas
such as environmental technology, safety technology, information
technology, and product and unit complementation.

Akio Toyoda, President, Toyota Motor Corporation and Osamu Suzuki, Chairman,
Suzuki Motor Corporation (at the press conference held on 12 October, 2016)14 SUZUKI MOTOR CORPORATION

Topics

November 2016

November 2016
Suzuki cooperates on Manufacturing Skill Transfer
Promotion Programme, establishes training institutein India
Suzuki Motor Corporation is collaborating on the Manufacturing
Skill Transfer Promotion Programme agreed between the governments of India and Japan on 11 November, 2016, having decided
to establish an industrial training institute in the Mehsana districtof Gujarat state to support human resource development in India’s
manufacturing sector.
The industrial training institute has been established as theJapan-India Institute for Manufacturing (JIM), and opened on 1
August, 2017.
In promoting the Indian government’s “Make in India” and “Skill India” initiatives, Suzuki will be helping through Japanese manufacturing to cultivate India’s human resources and develop its manufacturing industry.

Suzuki launches new Solio and Solio Bandit with
newly-developed hybrid system
Suzuki has launched new versions of the Solio and Solio Bandit
equipped with a newly-developed hybrid system. While maintaining
the Solio’s original appeal of a compact body and roomy cabin, the
new models adopt Suzuki’s unique hybrid system combining Motor
Generator Unit with Auto Gear Shift (AGS) to realize low fuel consumption of 32.0km/L* together with a powerful sense of acceleration.
* Measured in JC08 test cycle and verified by Japan’s Ministry of Land, Infrastructure, Transport and Tourism.

Image of hybrid system
Signing ceremony held at the Japanese Prime Minister’s office(provided by the Cabinet Office of Japan)

October, November 2016
Suzuki unveils 9 new motorcycle models at
European motorcycle show
At INTERMOT held in October in Cologne, Germany, Suzuki Motor
Corporation unveiled five new motorcycle models for the overseas
market mainly targeting Europe and North America.
Comprehensively enhanced for the first time in eight years, the sixth
generation of Suzuki’s flagship supersport bike GSX-R1000 and its
advanced version GSX-R1000R have been further evolved by incorporating technologies developed in MotoGP.
In addition, four more new models for the overseas market were
unveiled at Milan Show in November, including the new GSX250R.
Suzuki’s motorcycle business is playing a vital role in strengthening
the Suzuki brand. We strive to enhance our product series and will
actively release original products that surpass our customers’ expectations.

December 2016
Suzuki achieves ASV++ rating in JNCAP preventive
safety performance assessment
Suzuki cars equipped with Dual Camera Brake Support (DCBS), a
stereo camera type collision-mitigating system, or Dual Sensor
Brake Support (DSBS), a monocular camera and infrared laser radar
device, have attained the top rating of ASV++*1 in the FY2016 JNCAP*2 program of preventive safety performance assessment.
In FY2016 about 60% of passenger cars (minivehicles and standard and small vehicles) sold by
Suzuki were fitted with a collision-mitigating system including one of the above brake supports.
Suzuki will continue to enhance our safety technologies going forward as we work on improving
the safety of our vehicles.
【Suzuki models certified with ASV++】
Equipped with DCBS

Equipped with DSBS

Minivehicle

Hustler, Spacia

WagonR

Standard andsmall vehicle

Solio, Ignis

Swift*For models equipped with optional safety package.
* 1 ASV: Advanced Safety Vehicle* 2 JNCAP: Japan New Car Assessment Program

GSX-R1000RSUZUKI MOTOR CORPORATION 15

Topics

December 2016
Suzuki launches all-new SwiftThe new Swift has adopted a daringly advanced design while retaining the essential Swift DNA. Onto the new-generation platform
HEARTECT is installed a mild hybrid 1.2L engine or 1.0L direct-injection turbo engine to deliver both driving performance and fueleconomy. Launched in 2004, the Swift is Suzuki’s flagship compactcar, which is now manufactured at overseas plants too, and soldaround the world.

January 2017
MotoGP project for the 2017 Championshipannounced
Suzuki Motor Corporation has presented its new project for TeamSUZUKI ECSTAR, a team competing in the MotoGP class of theworld’s premier motorcycle racing series, the 2017 FIM* Road Racing Grand Prix (MotoGP).
Two new riders, Andrea Iannone (Italy), who was ranked ninth in the
MotoGP class last season, and Alex Rins (Spain), who has steppedup from the Moto2 class, are competing. As well as enhancing machine development, Suzuki will strive to improve its brand image by
feeding this back into its products and developing more attractive
bikes.
* FIM: Fédération Internationale de Motocyclisme (International Motorcycling
Federation)

Andrea Iannone (left) and Alex Rins (right)

February 2017
December 2016

February 2017

Vitara Brezza wins Indian Car of the Year

Gujarat Plant in India starts operation

The new SUV Vitara Brezza, manufactured and sold by Suzuki’s Indian subsidiary Maruti Suzuki India Limited, has won Indian Car of
the Year (ICOTY) 2017.
The Vitara Brezza is a stylish urban compact SUV developed by focussing on Indian customers’ tastes and values, such as by keeping
vehicle length under 4m to gain tax incentives. Sales of the Vitara
Brezza reached 100,000 units in March 2017, about one year after
launch, making it a core model that is leading Maruti Suzuki India
Limited’s sales and India’s growing SUV market.

Suzuki Motor Gujarat Pvt. Ltd. (SMG), established in Ahmedabad,
Gujarat in India, has started to manufacture Baleno from 1 February.
The Gujarat Plant is located close to Mundra Port, and will be utilised as the export hub for markets including Europe, Africa andJapan.
SMG is also planning construction of its Gujarat Plant No.2 andEngine & Transmission Plant. Suzuki’s total production capacity inIndia upon completion of Plant No.2 is forecast to reach 2 million
units, which will meet growing demand in India’s automobile market.

Launching event held in India (February 2016)16 SUZUKI MOTOR CORPORATION

Gujarat Plant

Topics

February 2017
Suzuki launches all-new WagonR and WagonR
Stingray
The all-new WagonR and WagonR Stingray offer even roomier cabin
space and further enhance the user-friendliness of a miniwagon,
while adopting three distinctive styling designs. Onto the newgeneration platform HEARTECT is installed a mild hybrid system thatlets the vehicle drive solely on motor when it starts moving, which
realises a low fuel consumption of 33.4km/L*. There are advanced
safety technologies such as the Dual Sensor Brake Support collision-mitigating system and head-up display, and user-friendlinesshas been enhanced such as with umbrella holders on the inside ofboth rear doors.

March 2017
Ignis Finishes in Top 3 in 2017 World Urban
Car Category
The Suzuki Ignis compact car finished in the Top 3 of the Urban
Car category at the World Car Awards held by the WCA (World Car
Awards). The Urban Car category was instigated for the first time thisyear in order to select the world's top cars for urban environments.
The Ignis is a stylish and highly-manoeuvrable compact crossovermodel that is sold throughout the world, including Japan, India, andEurope.

* Measured in JC08 test cycle and verified by Japan’s Ministry of Land, Infrastructure, Transport and Tourism. For HYBRID FX (2WD) WagonR, HYBRID FZ(2WD) WagonR, and WagonR Stingray HYBRID X (2WD) models.

February 2017
Suzuki Foundation funding for FY2016
Founded in March 1980 to commemorate the 60th anniversary of
the foundation of Suzuki Motor Corporation, the Suzuki Foundation
provided financial assistance in FY2016 to 38 research initiatives
totalling ¥78 million in the form of scientific technology research
assistance and proposed subject research assistance.
This was the Foundation’s 37th round of financial assistance, which
has included research funding for universities and research institutes nationwide and grants for accepting overseas researchers inorder to support technical development in the machine industry andencourage and assist young people keen to get involved in thesefields. Since its launch, the Foundation has supported 1,516 projects
in all with financial assistance totalling ¥1,716.6 million.

SUZUKI MOTOR CORPORATION 17

Directors, Auditors and Officers

Directors, Auditors and Officers[Representative Directors]
Representative Director
and Chairman(Chairman of theBoard of Directors)

Osamu Suzuki

Representative Director
and Vice Chairman

Yasuhito Harayama

Representative
Director andPresident (CEO & COO)

Toshihiro Suzuki

Supporting Chairman[Directors]
Director and SeniorTechnical Executive
Director andManaging Officer
Director

Osamu Honda
Masahiko Nagao

Executive General Manager, Corporate Planning OfficeHiroaki Matsuura

Executive General Manager, Manufacturing Engineering

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]
Audit & Supervisory
Board Member
Audit & Supervisory
Board Member (Outside)

Kunio Nakamura
Eiji Mochizuki
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 an 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

Executive General Manager, Global IT

Toshiaki Hasuike

Executive General Manager, Automobile Engineering[Managing Officers]

Managing Officer

Kazuo Hakamata
Masato Kasai
Izumi Oishi
Taisuke Toyoda
Hirofumi Nagao
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

18 SUZUKI MOTOR CORPORATION

Production & Purchasing, PT. Suzuki Indomobil Motor (Indonesia)
Executive General Manager, Customer Quality and Service
Executive General Manager, Manufacturing
Executive General Manager, Finance
Based in Pak Suzuki Motor Co., Ltd. (Pakistan)
President, Chongqing Changan Suzuki Automobile Co., Ltd. (China)
President, PT. Suzuki Indomobil Motor (Indonesia)
President, Suzuki Motor Sales Kinki Inc.
Executive General Manager, Administration
Executive General Manager, Domestic Marketing I, Domestic Marketing
Deputy Executive General Manager, Manufacturing (Production Quality Assurance & Overseas Manufacturing)
Executive General Manager, Global Automobile Marketing
Deputy Executive General Manager, Automobile Engineering (Development Quality)
Executive General Manager, Domestic Marketing II, Domestic Marketing
Executive General Manager, Purchasing
Division General Manager, Domestic Marketing Administration & Promotion Division, Domestic Marketing
Deputy Executive General Manager, Automobile Engineering (Powertrain)
Deputy Executive General Manager, Manufacturing Engineering
Executive General Manager, Automobile Product & Cost Planning
Executive General Manager, Vehicle Regulations and Engineering Administration

Corporate Governance Issues

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
The Company has elected to be a company with Audit & Supervisory Board.
In addition to the supervisory function of execution of business by the Board of Directors and the auditing function by the Audit &Supervisory Board, establishment of Advisory Committee on Personnel and Remuneration, etc. of which highly independent Outside
Directors and Outside Auditors as the advisory body of the Board of Directors enables enhancement of governance.
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
Appoint/Dismiss

Appoint/Dismiss

Appoint/Dismiss

Cooperate

Audit

Board of Directors
8 Directors ( 2 Outside Directors )Submitreports

Audit & Supervisory Board
5 Company Auditors
Secretariat
of Audit &Supervisory
Board

Consult
ReportAdvisory Committee
on Personnel andRemuneration, etc.

Instruct

ReportAudit
Department

Supervise

Independent Auditor(3 Outside Auditors)

Accounting audit

Cooperate

Instruct

Executive
Committee

SubmitCorporate GovernanceCommittee

Instruct

Various meetings on
management andexecution of operation
Communicate
policySupervise

External
LawyerReportRisk Management Hotline

Consultation
ReportPromotecomplianceand riskmanagement
Audit Audit(Whistleblowing system)

Accounting audit

Each division of the Company / Subsidiaries and affiliates of the Company

SUZUKI MOTOR CORPORATION 19

Risks in Operations

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 FY2016.

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 about 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 theGroup procures 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.
20 SUZUKI MOTOR CORPORATION

Risks in Operations

n 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.

SUZUKI MOTOR CORPORATION 21

The Status of the Corporate GroupThe Status of the Corporate GroupThe outline of the corporate group
The corporate group of the Company consists of consolidated subsidiaries of 136 companies and affiliates of 32. The main businesses are
manufacturing and marketing of automobiles, motorcycles, marine & power products, motorised wheelchairs, electro senior vehicles andhouses, further developing the businesses of logistics and other services related to the respective operations.
The position of the group companies in relation to the segmentation is as follows.

Automobile
Automobiles are manufactured by the Company as well as in overseas, by subsidiaries, Magyar Suzuki Corporation Ltd., Maruti Suzuki
India Limited and by an affiliate, Chongqing Changan Suzuki Automobile Co., Ltd. and others. Some of parts are manufactured by Suzuki Auto Parts Mfg. Co., Ltd. and others, and they are purchased by the Company.
The marketing of automobiles is carried out in the domestic market by a subsidiary, Suzuki Motor Sales Kinki Inc. and other marketingcompanies throughout the market, and in overseas markets, by a subsidiary, Suzuki Deutschland GmbH and other marketing companies and manufacturing & marketing companies. The business of logistics services is conducted by a subsidiary, Suzuki Transportation& Packing Co., Ltd.

Motorcycle
Motorcycles are manufactured by the Company as well as in overseas, by a subsidiary Thai Suzuki Motor Co., Ltd. and others. Some ofparts are manufactured by a subsidiary, Suzuki Auto Parts Mfg. Co., Ltd. and others, and those parts are purchased by the Company.
The marketing of the motorcycles is conducted in the domestic market by a subsidiary, Suzuki Motorcycle Sales Inc. and other marketing companies, and in overseas markets through a subsidiary, Suzuki Deutschland GmbH and other marketing companies and manufacturing & marketing companies.

Marine and Power products, etc.
Outboard motors are manufactured mainly by the Company and marketed by a subsidiary, Suzuki Marine Co., Ltd. and others.
In the domestic market, the marketing of motorised wheelchairs and electro senior vehicles are conducted by a subsidiary, Suzuki Motor Sales Kinki Inc. and others, and the marketing of houses is conducted by a subsidiary, Suzuki Business Co., Ltd.

22 SUZUKI MOTOR CORPORATIONThe Status of the Corporate GroupOperation Flow Chart
Operation flow chart is as follows (Major companies and businesses only)

No marks : Subsidiaries: Affiliates
Overseas Manufacturing &Marketing Companies

Flow of products, parts

A/M M/C M/PMagyar Suzuki Corporation Ltd.

Flow of services

Maruti Suzuki India Ltd.
A /M : Automobile
M/C : Motorcycle
M/P : Marine and Power products, etc.

Suzuki Motor Gujarat Private Ltd.
Suzuki Motorcycle India Private Ltd.
PT Suzuki Indomobil Motor
Pak Suzuki Motor Co., Ltd.
Suzuki Motor (Thailand) Co., Ltd.
Thai Suzuki Motor Co., Ltd.
Suzuki Philippines Inc.
Suzuki Manufacturing ofAmerica Corp.
Krishna Maruti Ltd.

Domestic Manufacturing Companies A/M M/C M/P
Snic Co., Ltd.

Jiangxi Changhe Suzuki
Automobile Co., Ltd.

Suzuki Toyama Auto Parts Mfg Co., Ltd.

The Company

Hamana Parts Industry Co., Ltd.
Overseas Marketing Companies

A/M M/C M/PSuzuki Deutschland GmbH
Suzuki GB PLC
Suzuki France S.A.S.
Suzuki Italia S.p.A.
Suzuki Motor Iberica, S.A.U.

Logistic Services
Suzuki Transportation& Packaging Co., Ltd.

A/M M/C M/PDealers and Customers

Chongqing Changan
Suzuki Automobile Co., Ltd.

Suzuki Auto Parts Mfg. Co., Ltd.

Suzuki Finance Europe B.V.
Taiwan Suzuki Automobile Corp.
Suzuki Motor of America, Inc.
Suzuki Australia Pty. Ltd.
Suzuki Motor de Mexico, S.A. de C.V.

Domestic Marketing Companies

A/M M/C M/PSuzuki Motor Sales Tokyo Inc.
Suzuki Motor Sales Hamamatsu Inc.
Suzuki Motor Sales Kinki Inc.
Suzuki Motorcycle Sales Inc.
Suzuki Marine Co., Ltd.
Suzuki Finance Co., Ltd.

Other Domestic Companies

A/M M/C M/PSuzuki Business Co., Ltd.

SUZUKI MOTOR CORPORATION 23