口434 (215 + 4 + 215) x 280 mm----W-

三

ANNUAL REPORT2016

SUZUKI11

SUZUKI MOTOR CORPORATIONANNUAL REPORT 2016
Printed ,n Japanf

SUZUKI MOTOR CORPORATION
300 Takatsuka-Cho,
Minami-Ku, Hamamatsu-shi,
Shizuoka, Japan 432-8611
http://www.globalsuzuki.com

111

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_______________________________________________________________ 7
Automobiles_____________________________________________________________ 8
Motorcycles_____________________________________________________________ 10
Marine Products_________________________________________________________ 12
Others__________________________________________________________________ 13
Topics_____________________________________________________________________ 14
Directors, Auditors and Officers______________________________________________ 17
Corporate Governance Issues________________________________________________ 18
Risks in Operations_________________________________________________________ 26
The Status of the Corporate Group____________________________________________ 28
Financial Section___________________________________________________________ 30
Company Outline___________________________________________________________ 67

Mission Statement
1.Develop products of superior value by focusing 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
There are two items to report in advance of the Outline and Resultof Business.
The first is regarding the arbitration case with Volkswagen AG raisedin November 2011, which has been a source of disturbance to ourshareholders over several years. The contract was annulled throughthe arbitration award of August 2015, and in the following monthof September, the Company’s stocks were successfully restored.
Furthermore, in March 2016, the Company canceled some of thestocks it repurchased.
Second, the Company wishes to express its profound apologies forthe disturbance caused to our shareholders as a result of casesof improper activities that were inconsistent with national regulations with regards to gas emission and fuel consumption testing of
the Company’s automobiles. The Company will take preventative
measures to ensure that this will not happen again, and will work
to ensure thorough compliance and strengthen risk management
systems in all fields of its business.

Management results of this fiscal year
As for the management environment of the Group for FY2015, economic recoveries of the US, Europe and India are improving, but on
the other hand, economy of China and ASEAN is remaining stagnant.
And furthermore, there are concerned situations about the influence of normalization of monetary policy in the US, trend of crude
oil price and others. In Japan, although the economy is recoveringmoderately on the back of various measures introduced by the government, its outlook is uncertain with the advancement of the appreciation of the yen since the beginning of 2016 and others.
Under these circumstances, the consolidated net sales of this fiscal year (April 2015 to March 2016) increased by ¥165.2 billion(5.5%) to ¥3,180.7 billion compared to the previous fiscal year. The
Japanese domestic net sales decreased by ¥46.7 billion (4.3%) to¥1,047.9 billion year-on-year owing to the impact of the hike inthe rate of the light motor vehicle tax and decrease in the OEM
sales. The overseas net sales increased by ¥211.9 billion (11.0%) to¥2,132.8 billion year-on-year mainly owing to the increase in thesales of automobile in India.
In terms of the consolidated income, the operating income increased by ¥15.9 billion (8.9%) to ¥195.3 billion year-on-year mainly
owing to the increase in the income in India. The ordinary income
increased by ¥14.8 billion (7.6%) to ¥209.1 billion year-on-year. The
net income attributable to owners of the parent increased by ¥19.8
billion (20.4%) to ¥116.7 billion year-on-year.

Basic policies for profit distribution
The Group will be celebrating its 100th anniversary of foundationin 2020. The Group will put efforts into strengthening of its management base, by founding a five-year from 2015 for the Group tocontinuous growth for the next 100 years.
2 SUZUKI MOTOR CORPORATION

For the moment, the Group will prioritize growth investment centering on India, while recognizing that capital efficiency and shareholders’ return are also important management issues. In light of
this, the Group will be responding to the capital issue by balancing
enhancement of shareholders’ equity and dividend payment.
In the New Mid-Term Management Plan SUZUKI NEXT 100, theCompany set the consolidated dividend payout ratio of more than
15% as the shareholder return target in FY2019.
As for this fiscal year, the Company implemented purchase andretirement of treasury stocks. Taking this into consideration, basedon the net income attributable to owners of the parent excluding
the gain on sales of the ordinary shares of Volkswagen AG, theyear-end dividends was the same as the previous fiscal year at¥17.00 per share. As a result, the annual dividends including theinterim dividends was ¥32.00 per share, up by ¥5.00 per sharefrom the previous fiscal year.

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.
The Group will be celebrating its 100th anniversary of foundationin 2020. In order for the Group to continuous grow for the next
100 years, the Group will put efforts into strengthening of management base by positioning the next five years as the period tostabilize the foundation of management. The Group will tackle asTeam 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 sustainablegrowth.
n Basic Policy
By returning to the origin of “Develop products of superior value by
focusing on the customer” as mentioned in the first paragraph ofthe mission statement, the Group will strengthen its business basethrough the action under the New Mid-Term Management Plan.
Particularly on the quality management, the Group will make thecustomers’ safety and security its top priority, develop and produce high-quality products which the customers can use securely,
and provide after services. In the case where a problem related to
product quality occurs, the Group will respond sincerely to what thecustomers say, grasp the problem as early as possible, take appropriate measures based on thorough investigation of its cause anddo its utmost to enable our customers to continue using our products securely.

A Message from the Managementn Business Strategy- Automobile Business
The Group concentrates on Mini to C, and SUV segment models
to correspond to the expanding global compact car market.
For development efficiency, the Group plans to consolidate
platform and concentrate development of gasoline engine. The
Group plans to introduce new 20 models globally in five years.
Concerning regional strategy, the Group will be focusing on Japan and Asia centering on India.
Japan – Minicar share of more than 30%,
Compact car sales of more than 100,000 unitsl India – Passenger car share of more than 45%l- Motorcycle Business
The Group will strive to eliminate its loss-making structure
through selection and concentration and develop product thatclearly defines characteristics of Suzuki. The Group will be focusing particularly on the 150cc and up, backbone, and sport
categories.
- Outboard Motor Business
The Group will make “THE ULTIMATE 4-STROKE OUTBOARD” its
new brand slogan and aim at creating the world top 4-STROKE
outboard motors brand by focusing on strengthening sales in
the US and development of Asian market.

Representative Director and Chairman

Osamu Suzuki

n Mid-Term Management Target
As for the consolidated net sales, the Group will aim to promptly
exceed its highest-ever marked in FY2007 (¥3,502.4 billion) bysteadily increasing. By balancing between investments for growthand strengthening of its management base, the Group will consistently promote efforts for enhancing corporate value.
For the details of Mid-Term Management Target, please refer tothe next page.
The Group has the motto “Develop products of superior value by
focusing on the customer” in the first paragraph of its mission
statement.
We will continue to strive to manufacture truly valuable products
appreciated by customers.
We are committing ourselves to making efforts to promote theproduction of small and subcompact vehicles and the development of environmentally benign products needed by customers,
with the slogan “Small Cars for a Big Future.”
We are making efforts to promote the “to be small, less, light,
short and beautiful” slogan in every field, and we have been working for efficient, well-knit, and healthy management.
We look forward to the continued support and encouragement of
our stockholders.

Representative Director and President (CEO and COO)

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 stabilize 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 focusing 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

voice

who can take action by thinking smarter● Making of reliable brand● Arrangement of environment for

motivating employees

Globalization● Establishment of new

management structure● Strengthening of global
management

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

Stable Management Base
● Diversification of Sourceof 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

Centered in Japan and India, Asia is the main region

Consolidation ofPassenger Platform
Concentration of
Development ofGasoline 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 modularization

Maintain market and employment by placing
as the base of development and productionl 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

Japan

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

Other than gasoline 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 centering on the expanding new buyers, fulfill 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

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”
l Pursue fun-to-ride and easy-to-ridel Feedback of MotoGP technologieslEmerging
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
ReturnFY2016Disclosed ValueFY2019Target¥3,180.7 billion¥3,100.0 billion¥3,700.0 billion

6.1%

5.8%

7.0%

ROE

9.6%

—

Dividend
payout ratio

13.6%(¥32.00 per share)

more than 15%¥131.0 billion¥140.0 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.

FY2015ResultMotorcycle

Consolidated Net Sales

FY2015ResultGlobal 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.

FY2016Disclosed ValueFY2019TargetJapan

630,000

650,000

Europe210,000

230,000

700,000
280,000

Asia

1,840,000

1,890,000

2,200,000

Others180,000

190,000

220,000

Total

2,860,000

2,960,000

3,400,000

Japan

60,00070,00070,000Europe50,00050,00070,000

North America

50,00050,00060,0001,130,000

1,150,000

1,500,000

Asia
Others220,000

190,000

300,000

Total

1,500,000

1,500,000

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
Thousands of US
dollars (except per
share amounts)

SUZUKI MOTOR CORPORATIONAND CONSOLIDATED SUBSIDIARIES
Years ended 31 March, 2016 and 2015

Millions of yen(except per share amounts)

2016

2015

2016

Net sales..................................................................................

¥3,180,659¥3,015,461$28,227,361

Net income attributable to owners of the parent....................

116,660

96,862

1,035,323

Primary.................................................................................

234.98172.67

2.09

Fully diluted..........................................................................

234.92172.63

2.09

Net income per share:

Cash dividends per share.......................................................

32.00

27.00

0.28

Net assets................................................................................

1,187,703

1,701,390

10,540,496

Total current assets..................................................................

1,632,630

2,008,729

14,489,091

Total assets..............................................................................

2,702,008

3,252,800

23,979,484

Depreciation and amortization................................................

168,315

134,377

1,493,749

Note:

Yen amounts are translated into US dollars, for convenience only, at ¥112.68=US$1, the prevailing exchange rate on
31 March, 2016.

Net Sales
Years ended 31 March (Millions of yen)

Net Income Attributable to
Owners of the Parent

Net Income Per ShareYears ended 31 March (yen)Years ended 31 March (Millions of yen)234.98116,660
191.60107,484

172.6796,862
3,180,659
2,938,314

3,015,461
143.3180,3892,512,186 2,578,317

96.06

53,88720122013

6 SUZUKI MOTOR CORPORATION

2014

2015

2016

2012

2013

2014

2015

2016

2012

2013

2014

2015

2016

Year in Review

Year in Review
n Production
Automobile Production

Japan

Overseas

Years ended 31 March(Thousand units)

Total

2012

1,782

1,020

2013

1,834

1,044

2,878

2014

1,859

998

2,857

2,802

2015

1,988

1,055

2016

2,090

861

Motorcycle Production

2,951

Overseas

Years ended 31 March(Thousand units)(ATV included)

2,400

2012
2013

3,043

Japan

Total

174 2,574

2,100

169 2,269

2014

1,852

180

2015

1,645

154 1,799

2016

1,356

2,033

122 1,479

n 2016 Net Sales
2016 Net Sales By Products

2016 Net Sales By Market(Year ended 31 March, 2016 Millions of yen)

(Year ended 31 March, 2016 Millions of yen)

Marine & Power
Products, etc.

Others266,329
8.4%

68,2532.1%

Motorcycle
233,889
7.4%

Automobile
2,878,515
90.5%

Europe404,722
12.7%

North
America
67,002
2.1%

Japan
1,047,883
32.9%

Asia
1,394,720
43.9%

SUZUKI MOTOR CORPORATION 7

Year in Review

Automobiles
Suzuki’s Worldwide Manufacturing and Sales
Total overseas automobile production for FY2015 increased by 5.2% year-on-year to 2,090,000 units. Worldwide production, including Japan,
decreased by 3.0% year-on-year to 2,951,000 units.
Sales of automobiles in overseas market increased by 5.7% year-on-year to 2,231,000 units, while total global sales, including Japan, decreased by 0.2% year-on-year to 2,861,000 units.

Operating Results by Segment
In the automobile business, the operating income increased by ¥20.8 billion (12.1%) to ¥192.6 billion year-on-year mainly owing to the increase in the income in India.

The Japanese Market
1. Overview of the Japanese Automobile Market
Total domestic automobile sales volume in FY2015 declined by 7% year-on-year to 4,938,000 units. It fell year-on-year for the second fiscal
year in a row, and dipped below five million units for the first time in four fiscal years. Sales of registered vehicles were flat on the year at
3,124,000 units. Sales of minivehicles fell largely by 17% year-on-year to 1,813,000 units owing mainly to the impact of hike in light motor
vehicle tax from April 2015.

2. Suzuki Sales
Suzuki’s domestic automobile sales in FY2015 fell year-on-year in volume
terms for the first time in five fiscal years. They declined by 17% year-on-year
to 630,000 units. Suzuki’s sales of minivehicles fell largely by 19% year-onyear to 549,000 units. Suzuki’s sales of registered vehicles rose year-on-year
for the first time in three fiscal years. They grew by 6% year-on-year to 81,000
units. The key driver of that growth were comprehensively enhanced SOLIO
launched in August and the newly-introduced ESCUDO and IGNIS.

ALTO Lapin

3. Suzuki Topics in FY2015• In June 2015, Suzuki launched a comprehensively enhanced version of the
ALTO Lapin minicar.
• In August 2015, Suzuki launched comprehensively enhanced versions of
SOLIO and SOLIO Bandit compact cars.
• In October 2015, Suzuki launched the ESCUDO compact SUV. The Company
is having the ESCUDO built by its Hungarian subsidiary, Magyar Suzuki, and isimporting it into Japan.

SOLIO• In November and December 2015, ALTO and ALTO Lapin minicars won the2016 RJC Car of the Year and the 2015-2016 Car of the Year Japan Small Mobility Award.
• In December 2015, Suzuki expanded the ALTO range by adding the performance-enhanced ALTO Works.
• In February 2016, Suzuki launched the IGNIS, a new-genre mini crossover ofcompact car and SUV.

ESCUDO• In March 2016, Suzuki launched the all-new hatchback BALENO. The Company is having the BALENO built by its Indian subsidiary, Maruti Suzuki India,
and is importing it into Japan.

BALENO

8 SUZUKI MOTOR CORPORATION

Year in Review

Overseas Markets
1. Overview of Suzuki’s Main Overseas Automobile Markets
Sales of automobiles (passenger cars and multi-utility vehicles) in India grew in FY2015 by 7% year-on-year to 2,789,000 units owing to theeconomic recovery. Sales of passenger cars in Europe also grew by 3% year-on-year to 17,015,000 units, as well as in China by 5% year-onyear to 24,931,000 units. Sales in the five key ASEAN countries (Indonesia, Thailand, Vietnam, the Philippines, and Malaysia) fell by 3% yearon-year to 3,009,000 units owing to the continuing economic slump. The future outlook is unclear, with negative factors such as the worrying trend in crude oil price and the appreciating yen since the beginning of 2016.

2. Suzuki Sales
Suzuki’s overseas automobile sales volume in FY2015 grew by 6% year-on-year to 2,231,000 units. Suzuki’s sales in India rose by 12% yearon-year to a record-high 1,305,000 units owing to strong demand for models including the BALENO and VITARA BREZZA. Suzuki’s sales in
Europe grew by 6% year-on-year to 207,000 units owing to strong demand for models including the VITARA. Suzuki’s sales in China fell by
26% year-on-year to 186,000 units, and sales in Indonesia by 19% year-on-year to 120,000 units.

3. Suzuki Topics in FY2015• In May 2015, cumulative production units of the Indian subsidiary Maruti Suzuki India reached 15 million units.
• Also in May 2015, Suzuki held an opening ceremony for the new automobile assembly plant (Cikarang Plant) of the Indonesian subsidiarySuzuki Indomobil Motor.
• In June 2015, Suzuki agreed to form collaboration with Proton in
Malaysia.
• Also in June 2015, production of CIAZ began at a Thai subsidiarySuzuki Motor (Thailand), and it was launched in July.
• In July 2015, production and sales of ERTIGA began at a Myanmar
subsidiary Suzuki Myanmar Motor.
• Also in July 2015, new sales channel NEXA was established in India, and S-CROSS was launched.
• In October 2015, Suzuki began a series of launches for the BALENO by putting it on the market in India.
• In February 2016, the all-new VITARA BREZZA compact SUV wasunveiled in India.

VITARAVITARA BREZZABALENOSUZUKI MOTOR CORPORATION 9

Year in Review

Motorcycles
Suzuki’s Worldwide Manufacturing and Sales
Total overseas motorcycle production (including ATVs) in FY2015 decreased by
17.5% year-on-year to 1,356,000 units. Worldwide production, including productionin Japan, also decreased by 17.8% year-on-year to 1,479,000 units.
Sales of motorcycles (including ATVs) in overseas market decreased by 15.4% yearon-year to 1,435,000 units, while total global sales, including Japan, also decreased
by 15.2% year-on-year to 1,496,000 units.

Operating Results by Segment
In the motorcycle business, the operating loss of ¥0.7 billion in the previous fiscal
year became an operating loss of ¥10.2 billion partly owing to the quality-related
expenses.

VITARA

Let’s Basket

The Japanese Market
1. Overview of Japanese Motorcycle Market
The total domestic motorcycle sales (factory shipments) of the four Japanese manufacturers in FY2015 fell by 7% year-on-year to 365,000 units. Sales of models with engine displacements of 126cm3 and higher were down 1% year-on-year at 84,000 units.
Sales of models with engine displacements up to 125cm3 were down 8% year-on-yearat 281,000 units.

2. Suzuki Sales
Suzuki’s domestic sales (factory shipments) of models with engine displacements of
126cm3 and higher fell by 24% year-on-year to 8,000 units. Although their sales were
led by the new GSX-S1000 ABS and GSX-S1000F ABS, they remained at that level owing
to the adjustment in inventory. The Company’s sales of models with engine displacements up to 125cm3 fell by 10% year-on-year to 50,000 units. Although their sales
were led by the new Address 110, they remained at that level owing to the adjustment
in inventory of models with engine displacement of up to 50cm3. Overall, Suzuki recorded a 12% year-on-year drop in sales (factory shipments) to 58,000 units.

Address 110

3. Suzuki Topics in FY2015• In April 2015, Suzuki launched 50cm3 scooters Let’s Basket and Address V50, which
are based on the Let’s, a 50cm3 scooter that’s light, fuel-efficient, and user-friendly.
Let’s Basket offers large-sized front basket and front inner pocket, while Address V50
offers sporty styling.

GSX-S1000 ABS• In July 2015, Suzuki launched the GSX-S1000 ABS and GSX-S1000F ABS. They offer uplifting feeling when accelerating, which can be enjoyed in city and on windingroad.
• TeamSUZUKI’s Yohei KOJIMA became the champion of the 2015 All Japan MotocrossChampionship in the top IA1 class. Suzuki achieved a 1-2 finish as his teammate Yoshitaka ATSUTA finished second overall.

Hayabusa

10 SUZUKI MOTOR CORPORATION

Year in Review

Overseas Markets
1. Overview of Suzuki’s Main Overseas Motorcycle Markets
Sales of motorcycles in Europe in FY2015 grew by 11% year-on-year to950,000 units. Sales of motorcycles (including ATVs) in North America wereflat on the year at 826,000 units. Sales in the six key ASEAN countries (Indonesia, Thailand, Vietnam, the Philippines, Malaysia, and Cambodia) declined by
7% year-on-year to 12,466,000 units. Sales in China also fell by 16% year-onyear to 8,663,000 units. Sales in India grew by 3% year-on-year to 16,456,000
units.

2. Suzuki Sales
Suzuki’s overseas motorcycle sales in FY2015 declined by 15% year-on-year
to 1,435,000 units. Sales in Europe grew by 7% year-on-year to 48,000 units.
Sales in North America also grew by 6% year-on-year to 46,000 units. Sales inthe six key ASEAN countries fell by 30% year-on-year to 304,000 units owing
mainly to a drop in sales in Indonesia. Sales in China also fell by 20% yearon-year to 453,000 units. Sales in India fell by 8% year-on-year to 313,000
units.

SV650 ABS

3. Suzuki Topics in FY2015• GIXXER SF, a fully faired sportbike launched in India in April 2015, received
bike of the year awards from various magazines for its performance anddesign.

RM-Z250• In November 2015, Suzuki unveiled the new road sportbike SV650 and the
GSX-R1000 concept model at the Milan Show held in Italy.
• Suzuki Endurance Racing Team, an endurance team of a subsidiary Suzuki
France that participates with the supersport bike GSX-R1000, achieved its
14th title (of which 11 titles won by the GSX-R1000) of the World Endurance Championship for the first time in two years.
• Suzuki returned to the world’s top
motorcycle racing series MotoGP
and achieved sixth places in threeraces. Team SUZUKI ECSTAR’s rider
Maverick VIÑALES won the Rookie of
the Year title.

ACCESS 125

Milan ShowWorld Endurance Championship

MotoGPGIXXER SFSUZUKI MOTOR CORPORATION 11

Year in Review

Marine Products
Operating Results by Segment
In the marine and power products, etc. business, the net sales
increased by ¥5.3 billion (8.3%) to ¥68.3 billion year-on-year mainly
owing to the increase in the sales of outboard motors in the US.
The operating income increased by ¥4.6 billion (55.8%) to ¥12.9 billion
year-on-year.

Overview of Marine Products
Suzuki’s domestic outboard motor sales in FY2015 fell by 5% year-onyear in volume terms and by 1% year-on-year in net terms.
Suzuki’s export sales surged by 3% year-on-year in volume terms andby 21% year-on-year in net terms. Sales in the United States made asignificant contribution. They were strong owing partly to foreign-exchange effects and partly to a shift in demand toward larger models.
Suzuki’s four-stroke outboard motors range from the DF2 (the lowestpower model, which delivers 1.49kW/2PS) to the DF300 (the highestpower model, which delivers 220.7kW/300PS). The Company produces
small models in Thailand and larger models at the Toyokawa Plant inJapan.

DF6A

Suzuki Topic in FY2015• The year 2015 marked 50 years of Suzuki outboard motors. Since
FY2014, the Company had been celebrating this milestone withvarious activities, and in FY2015, the Company wrapped up its
50th anniversary year by holding events such as global cleanup activities and fishing contest at Lake Hamana. Through these
events, Suzuki’s outboard motor brand images were enhanced.
• In the New Mid-Term Management Plan SUZUKI NEXT 100, theCompany set an aim at creating the world top 4-STROKE outboard
motors brand by making “THE ULTIMATE 4-STROKE OUTBOARD” its
new brand slogan. The Company will focus on strengthening sales
in the United States and development of Asian market.

DF300AP

12 SUZUKI MOTOR CORPORATION

DF200AP

DF200AP

DF6A

Year in Review

OthersEnvironmental Initiatives
As a manufacturer of automobiles, motorcycles, outboard motors, 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 clean-energy vehicles, and reducing
noise. In manufacturing, our efforts include reducing environmental risk, reducing
energy requirements, and promoting the use of alternative energy sources. In distribution, we focus on improving the operational efficiency and energy efficiency oftransportation and on promoting the three Rs (reducing, reusing, and recycling). In
marketing, we promote environmental management among our dealers and strive toensure 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 ENVIRONMENTAL & SOCIAL REPORT 2015

Suzuki Topics in FY2015• Suzuki published “Suzuki Environmental and Social Report 2015”. The Company has published a report about its environmental initiatives every year since FY1999.
• In August 2015, Suzuki launched comprehensively enhanced versions of SOLIO and SOLIO Bandit compact cars. Fuel efficiency of a newly-developed K12C DUALJET engine isenhanced while increasing torque in the low speed range. In addition to installing a mild
hybrid system*1, comprehensive weight savings of 100kg*2 lighter than its predecessor
realize fuel economy of 27.8km/L*3 (the best of its class in Japan)*4.
• Suzuki Makinohara Solar Power Plant, a solar power facility with a maximum capacity of
20MW (megawatt) which was being constructed at the Nakazato Industrial Park locatedin Makinohara, Shizuoka, started making test operation from October 2015.
• In January 2016, Suzuki’s Sagara Plant received the “ANRE (Agency for Natural Resources
and Energy) Director-General's Award (co-implementation field)” in the “FY2015 Energy
Conservation Grand Prize <Energy Conservation Case Example Category>”.
Since FY1990, Energy Conservation Grand Prize (organized by the Energy Conservation
Center, Japan) has been awarding products that excel in energy and electricity conservation, or business operators that have developed business models with high ramification for energy conservation. Energy Conservation Case Example Category was introduced in FY2011, awarding business operators that have made progress by promoting
electricity conservation and activities that excel in energy conservation of corporations,plants, offices, etc.
By co-developing an infra-red die heater with Chubu Electric Power and Metro Denki
Kogyo, and introducing it to the engine parts foundry process of the Sagara Plant, Suzuki
made efforts to shorten heating time and reduce energy consumption, as well as conserve labor and enhance safety and productivity of work.

SOLIO HYBRID MZSOLIO Bandit HYBRID MZ

Suzuki Makinohara Solar Power Plant

Upper dieHeating section
Lower dieInfra-red heaterGas burner

ExhaustAir pressure

Aluminium holding
furnace

Infra-red die heater*1 G variant is not installed with mild hybrid system.
*2 Comparison between the new SOLIO HYBRID MX two-wheel drive variant and the conventional SOLIO X-DJE two-wheel drive variant.
*3 Measured in the JC08 test cycle using SOLIO HYBRID MX and HYBRID MZ grades and SOLIO Bandit HYBRID MV grade (each with two-wheel drive). Verified by Japan’s Ministry of Land, Infrastructure, Transport and Tourism.
*4 Based on Suzuki research in August 2015 on compact height wagon (two-row, five-seater with engine displacement of 1.5L or less and overall heights of 1,550mm or more).

Suzuki’s cooperation with other automobile manufacturers
Suzuki has been cooperating with other automobile manufacturers both in and outside Japan.
Suzuki and Nissan have been supplying each other with vehicles in Japan on an original-equipment-manufacturer (OEM) basis since 2002.
To Mazda, Suzuki has been supplying vehicles in Japan since 1989, and has been supplying vehicles in Indonesia since 2013. Suzuki has
been also making vehicles’ OEM supply to Mitsubishi in Japan since 2011.
From Fiat, Suzuki has been sourcing its diesel engines for vehicles sold mainly in Europe since 2003. In India, Suzuki has been producing
diesel engines at its own factories since 2006 using technologies acquired from Fiat.
Since 2013, Suzuki has been supplying a British manufacturer, Caterham with 660cm3 engines and some drive-train components designed
for minivehicles for the installation on its sport cars. The car is sold also in Japan as a British-made minivehicle.
Suzuki continues pursuing opportunities and areas of cooperation with other manufacturers where effective use of companies’ business resources and mutual benefit can be expected.

SUZUKI MOTOR CORPORATION 13

Topics

TopicsMay 2015
Indian car subsidiary rolls out its 15 millionth vehicle
Maruti Suzuki India Limited (Maruti Suzuki), our Indian subsidiary, hasachieved 15 million accumulated units 31 years and five months after
starting production in December 1983 with the MARUTI 800, a model
based on the Japanese ALTO minicar. This comes only four years and twomonths after the company reached 10 million accumulated production
units in March 2011.
Maruti Suzuki is currently constructing a new manufacturing facility in
Gujarat to add to its existing Gurgaon andManesar manufacturing plants in
Haryana State. This will increase
the company’s annual maximum
production capacity in India to
1.75 million units.
The SWIFT Dzire was the 15 millionth unit

New automobile plant completed in Indonesia
PT. Suzuki Indomobil Motor, a subsidiary of ours in Indonesia, has completed
construction of its new automobile assembly plant (Cikarang Plant) within
the Greenland International Industrial Center (GIIC) located in Bekasi Regency, east of Jakarta. The Cikarang Plant started assembling engines andtransmissions in February 2014 and, upon completion of the automobile assembly plant, began producing the ERTIGA compact car in January 2015.
In the Indonesian market, where an LCGC (Low Cost Green Car) policy is being promoted, Suzuki Motor Corporation produces the 5-seater WAGON R,
which is compatible with this policy, as Japanese minicar production technology is utilized overseas.
The company is also carryingout the knockdown export of
the WAGON R from Indonesia to
Pakistan.

August 2015
Suzuki Education and Culture Foundation selects
scholarship students for FY2015
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 unable tofocus on their studies for financial reasons.
In FY2015, the 15th year of this scholarship, the Foundation supported 68
students in all, 55 at highschool and 13 at university.
This takes the number of recipients since the scholarship wasestablished in 2000 to commemorate the 80th anniversaryof the foundation of Suzuki
Motor Corporation to 272.

Maruti Suzuki launches S-CROSS under new sales
channel NEXA
Maruti Suzuki, has launched a
new sales channel NEXA aimed
at premium users, throughwhich it has begun selling the
S-CROSS, the first premium
crossover model in India.
Following on from the SCROSS, NEXA is launching
the hatchback BALENO in
October.
NEXA opened 100 dealerships
within FY2015 and plans toincrease this number in future.

Ceremony for launching S-CROSS

Tape cutting at the plant opening

June 2015
New structure and New Mid-Term Management
Plan announced
Suzuki Motor Corporation established its new executive structure on 30
June with Toshihiro Suzuki as the new President and COO, and at the sametime announced the New Mid-Term Management Plan SUZUKI NEXT 100, a
five-year plan from 2015. The Suzuki Group will be celebrating the 100th
anniversary of its foundation in 2020. To continue growing for another 100
years, the Group will, as Team Suzuki, develop its manufacturing base andoverhaul working procedures globally, and make efforts to strengthen its
management base with the next five years as a period of stabilization. Under
the New Mid-Term Management
Plan, the Group will unite as one
to enhance its corporate value
and aim for sustainable growth.

14 SUZUKI MOTOR CORPORATION

Image of new sales channel NEXA

Compact passenger cars SOLIO and SOLIO Bandit
launched
Suzuki Motor Corporation’s compact passenger cars SOLIO and SOLIO
Bandit models have been fully remodelled with features such as a large
interior space packaged in a compact body ideal for getting around town,
convenient sliding rear doors, and superb fuel economy performance.
The first time a newly developed lightweight, high-rigidity platform has
been adopted in a compact passenger car. Installing the new 1.2 Dualjetengine (K12C) and mild hybrid system and carrying out strict weight saving
has realized excellent fuel efficiency and dynamic driving.

Topics

Arbitration award for termination of business andcapital alliance with Volkswagen AG
Suzuki Motor Corporation filed a request at the International Court of Arbitration of the International Chamber of Commerce for Volkswagen AG (VW)
to terminate their business and capital alliance. The Tribunal found that the
Framework Agreement was validly terminated by Suzuki’s notice of termination dated 18 November, 2011, such termination being effective fromon 18 May, 2012. The Tribunal also upheld Suzuki's claim regarding VW’s
disposal of its shares in Suzuki and ordered VW to divest forthwith thoseshares to Suzuki, or a third party designated by Suzuki, using a methodthat is reasonably determined by Suzuki. As a result, Suzuki completed
the buying back of its shares on 17 September, 2015, and the sale of VW
shares held by Suzuki was also completed on 25 September.
Regarding deliberations
on Suzuki’s breachesof agreement, a settlement was reached in
February 2016, bringing
all arbitration proceedings to a close.

November 2015
ALTO passenger car series wins RJC Car of the Yearaward and Car of the Year Japan - Small Mobility award
The ALTO and ALTO Lapin minicars have won the 2016 RJC Car of the YearAward, and the ALTO, ALTO Turbo RS and ALTO Lapin the Small Mobility category of the 2015-2016 Car of the Year Japan awards. This is the first RJC
Car of the Year Award for the ALTO, which has a 36-year history since its
first launch in 1979, and the second win in succession for Suzuki following
the success of the HUSTLER last year.
The ALTO Lapin has also received the Grand Prix at the Auto Color Awards
2015-2016.

September 2015
Suzuki wins 2015 FIM Endurance World ChampionshipSuzuki Endurance Racing Team (SERT), the motorcycle racing team of Suzuki
Motor Corporation’s French subsidiary Suzuki France S.A.S., has won the FIM(Federation of International Motorcycling) Endurance World Championshipfor the first time in two years and the 14th time overall.
The Endurance World Championship is an annual competition for commercially available motorcycles and consists of four races a year.
The races demand overall
strength from the motorcycles
including driving performanceand durability, and Suzuki
takes part with its GSX-R1000
Supersport model.

SERT’s GSX-R1000

October 2015
Exhibited at the 44th Tokyo Motor Show 2015
At the 44th Tokyo Motor Show, organized by the Japan Automobile Manufacturers Association, Inc. (JAMA), Suzuki Motor Corporation showed manyreference exhibits such as the MIGHTY DECK, which offers new kinds of fun
in the minicar segment, the AIR TRISER embodying the concept of a private
lounge, and the HUSTLER SCOOT, which increases the ways in which people
can enjoy riding on two wheels.
Suzuki’s booth this time exhibited innovative ideas and cutting-edge technologies too, giving a feel for the potential of mobility in the future. Visitors’
sense of anticipation was also
h e i g h t e n e d bydisplays of the IGNIS (on sale fromFebruary 2016)
and ALTO Works(on sale from December 2015).

ALTO Series design & development team

January 2016
AGS wins Chairman’s Prize at the 13th New JSPMI Prizes
Suzuki Motor Corporation’s Auto Gear Shift (AGS) transmission has received
the Chairman’s Prize from the Japan Society for the Promotion of Machine
Industry (JSPMI) for the “development of AMT (Automated Manual Transmission) with enhanced drivability and user-friendliness”.
AMT is a new kind of transmission combining themerits of both manual and automatic transmissions. Suzuki has developed one called Auto
Gear Shift (AGS), which is installed widely inthe company’s overseas models and Japaneseminicars. AGS continues to evolve to provide
ever greater ease of use, such as a 2-speed
starting mode fitted in the 5AGS cars CARRY
and EVERY.
AGS developed by Suzuki

Sagara Plant Receives the FY2015 Energy Conservation
Grand Prize, Energy Conservation Category
Suzuki Motor Corporation’s Sagara Plant has received the Agency for Natural
Resources and Energy (ANRE) Director-General’s Award (co-implementation
field) in the Energy Conservation Category of the 2015 Energy Conservation
Grand prize (organized by the Energy Conservation Center).
The ANRE Director-General's Award (co-implementation field) was given to
Suzuki, Chubu Electric Power, and Metro Denki Kogyo for installing their codeveloped infra-red die heater into
Upper diethe engine parts foundry processof the Sagara Plant. Their efforts
Heating section
in significantly shortening heating
Lower dietime and reducing energy consumption, while enhancing laborsaving, work safety and productivAluminium holding
ity in the workplace, were highly
furnaceacclaimed.
Infra-red die heater
SUZUKI MOTOR CORPORATION 15

Topics

January 2016

February 2016

New mini crossover IGNIS launched
The IGNIS is a new-genre mini crossover based on the concept of a “functional and stylish mini crossover”, which is convenient for daily use while
also broadening the scope of outdoor and other possible leisure pursuits atweekends.
All variants are installed with a mild hybrid system and 1.2 Dualjet engine(K12C), realizing excellent fuel efficiency and dynamic driving. The IGNIS isalso planned to be distributed to Europe and other overseas markets as a
new-genre mini crossover born in Japan.

Suzuki Foundation selects 29 research initiatives to fundin FY2015
Founded in March 1980 to commemorate the 60th anniversary of the foundation of Suzuki Motor Corporation, the Suzuki Foundation provided financial assistance in FY2015 to 29 research initiatives totalling ¥68.03 million in
the form of scientific technology research assistance and proposed subject
research assistance.
This was the Foundation’s 36th round of financial assistance since its
launch, which has included research funding for universities and research
institutes nationwide and grants for accepting overseas researchers. The
Foundation has now supported 1,441 scientific research projects with financial assistance worth a total of ¥1,618.89 million.

Presentation ceremony

New outboard motors DF4A/5A/6A released
Suzuki Motor Corporation has unveiled its new outboard motors
DF4A/5A/6A at the 47th International Boat Show in Düsseldorf, Germany.
These motors have been made more compact and lightweight and reshaped to enhance their portability and user-friendliness as outboard
motors for small boats. Reducing the size of the previous motors hasrealized a 1kg weight reduction, while the carrying handle has been
made rounder and easier to hold and another grip added at the front.
The motors are produced at a Thai subsidiary, Thai Suzuki Motor Co.,
Ltd., and will be marketed worldwide including in Europe and Japan.

March 2016
Launch of new compact passenger car BALENO, produced
by Indian subsidiary Maruti Suzuki
The new BALENO model is produced by Indian subsidiary Maruti Suzuki andimported to Japan by Suzuki. Sold through the new sales channel NEXA
in India since October 2015, the BALENO has been highly acclaimed. The
launch event in Tokyo in March 2016 was also attended by His Excellency,
Sujan R. Chinoy, Indian Ambassador to Japan.
Roomy interior and ample luggage space are packaged in a flowing and elegant styling. Two models are available, one fitted with a 1.0L turbo engine
and the other with a 1.2L DUALJET naturally aspirated engine.
After Japan, the new BALENO is planned to be distributed as a global compact car to Europe and other markets worldwide.

Suzuki booth at boat show

Sujan Chinoy, Indian Ambassador to Japan, in the center at launch event

16 SUZUKI MOTOR CORPORATION

Directors, Auditors and Officers

Directors, Auditors and Officers(as of 1 July, 2016)[Representative Directors]
Representative
Director andChairman
Representative
Director andVice Chairman
Representative
Director andPresident (CEO & COO)

Osamu Suzuki

Yasuhito Harayama

Supporting Chairman

Toshihiro Suzuki[Directors]
Director andManaging
Officer

Director(Outside Director)

Takashi Iwatsuki

Executive General Manager, Global Business Administration & Planning

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
Yasuhiro Yamazaki
Norio Tanaka
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.

[Senior Managing Officers]
Senior Managing
Officer

Kenichi Ayukawa
Ichizo Aoyama

Executive General Manager, India / Africa Automobile Operations / Managing Director and CEO,
Maruti Suzuki India Ltd.
Executive General Manager, Global IT[Managing Officers]
Toshiaki Hasuike
Kazuo Hakamata
Masato Kasai
Izumi Oishi
Taisuke Toyoda
Hirofumi Nagao
Keiichi AsaiManaging Officer

Shuji Oishi
Kazuki Yamaguchi
Shigeyuki Yamamura
Toshiaki Suzuki
Hidenori Yamashita
Kinji Saito
Ichiro Onishi
Keiji Miyamoto
Kazuhiko Ayabe

Deputy Executive General Manager, Automobile Engineering /Joint Managing Director, Maruti Suzuki India Ltd.
Indonesia and Thai Automobile Division. (Based in S.I.M.)
Executive General Manager, Automobile Engineering
Executive General Manager, Manufacturing
Executive General Manager, Finance / Managing Officer, Finance Dept. / Managing Officer, Affiliates
Accounting Dept.
Division General Manager, Pakistan Automobile Division / Managing Director, Pak Suzuki Motor Co., Ltd.
(Pakistan)
President, Chongqing Changan Suzuki Automobile Co., Ltd. (China)
Division General Manager, Indonesia and Thai Automobile Division / President, PT. Suzuki Indomobil Motor(Indonesia)
President, Suzuki Motor Sales Kinki Inc.
Executive General Manager, Administration / Managing Officer, Human Resources Dept.
Executive General Manager, Domestic Marketing I, Domestic Marketing
Deputy Executive General Manager, Manufacturing (Production Quality Assurance & Overseas
Manufacturing)
Executive General Manager, Global Automobile Operations
Executive General Manager, Customer Quality Assurance
Executive General Manager, Domestic Marketing II, Domestic Marketing
Executive General Manager, Purchasing

SUZUKI MOTOR CORPORATION 17

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 realize 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 think is beneficial to understand the Company. We will further enhance the transparency of the Company.

2. Corporate Governance System
The Company has elected to be a company with the Audit & Supervisory Board with the supervisory function of execution of business by the Board of Directors and the auditing function by the Audit & Supervisory Board. In addition, in the belief that the Company
will be able to realize highly effective corporate governance by establishing the Advisory Committee on Personnel and Remuneration,etc. that include Outside Directors and Outside Audit & Supervisory Board Members (hereinafter “Outside Company Auditors”) as theirmembers who are highly independent, as the advisory body of the Board of Directors, the Company has elected to adopt the present
structure.

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

ReportAccounting audit

Audit
Department

Supervise

Cooperate

Instruct

Executive
Committee

SubmitCommunicate
reported
contents

Corporate GovernanceCommittee

External
Lawyer

Instruct

Various meetings on
management andexecution of operation
Communicate
policySupervise

Independent Auditor(3 Outside Auditors)

ReportPromotecompliance andrisk management

Risk Management Hotline(Whistleblowing system)

Audit

Audit

Accounting audit

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

18 SUZUKI MOTOR CORPORATIONCorporate Governance Issues(Board of Directors)
In addition to the regular meetings of the Board of Directors composed of 8 Directors including 2 Outside Company Directors held
every month, Directors hold a special board meeting whenever necessary, and discuss the matters set forth in the Articles of Incorporation and the laws and regulations, and important managerial agenda based on the deliberation criteria, and make decisions on a
sufficient discussion, including in terms of regulatory compliance and corporate ethics, and make efforts to strengthen oversight ofbusiness execution.
Also, for the purpose of enabling the agile corporate management, speeding up decision making and executing operations, and clarifying the individual responsibilities, the Company has introduced a Senior Managing Officer and Managing Officer system.
In order to clarify managerial accountability for individual Directors and flexibly respond to the changing business environment, theterm of each Director is set to one year.
(Outside Directors)
By electing Outside Directors who are highly independent of the Company and have no possibility of causing conflict of interest between them and shareholders, the Company enhanced supervision to management further, and is receiving beneficial advice andindication for the growth of the Company based on large stock of experience and professional knowledge.
(Executive Committee)
At the Executive Committee (Chairman: Representative Director and President) which is composed of Directors and Managing Officers, etc. as a council-system organization, important missions and strategies for management are cross-functionally and comprehensively discussed, while pre-reviewing matters to be discussed at the Board of Directors.
(Various meeting on management and execution of operation)
The Company enhances efficiency of management by enabling appropriate execution of operation through closely exchanging important information and identifying administrative issues. To achieve that, the Company holds various councils to discuss countermeasures on execution of management issues weekly, monthly, extraordinarily, or biannually, depending on the content. Members of
the council include Directors, Executive General Managers and Deputy Executive General Managers.
(Advisory Committee on Personnel and Remuneration, etc.)
Aimed to enhance clarity and objectivity upon electing candidates for Directors and Auditors, as well as deciding remuneration of
Directors, as an advisory committee for the Board of Directors, the Company establishes the Advisory Committee on Personnel andRemuneration, etc. composed of 5 members, of which 2 Outside Directors and 1 Outside Company Auditor make up the majority ofthe membership.
The committee discusses issues such as election standards and adequacy of candidates for Directors and Auditors, as well as adequacy of system and level of Director’s remuneration. The Board of Directors decides based on their results.
Decision for election and remuneration of candidates for Senior Managing Officers and Managing Officers who do not concurrently
serve as Directors are also based on results of the Committee’s discussion.
(Corporate Governance Committee)
For sustainable growth and enhancement of corporate value of the Group on a mid- to long-term basis, the Corporate GovernanceCommittee was established to thorough compliance and examines matters including risk management as well as promotes theimplementation of measures and policies thereof.
(Company Auditor’s Audit)
Audit & Supervisory Board of the Company is composed of 5 Audit & Supervisory Board Members (hereinafter “Company Auditors”)
including 3 Outside Company Auditors.
Pursuant to the standard for the Company Auditor’s Audit, set forth by the Audit & Supervisory Board, and following the policy ofauditing and division of duties, each Company Auditor has audited the execution of business in the Company in an appropriate manner by attending not only meetings of the Board of Directors but also important meetings such as the Executive Committee, viewing
circular resolutions, meeting minutes and other documents as well as receiving reports or having hearings on the state of businessfrom Directors.
In addition, the Company has established the Secretariat of Audit & Supervisory Board as the dedicated staff organization that is independent from the chain of command of Directors, etc. in order to reinforce a supportive system for duties of Company Auditors.
1 Full-Time Company Auditor and 1 Outside Company Auditor have large stock of knowledge in finance and accounting due to longexperience of being in charge of accounting in the Group as to Full-Time Company Auditor, and large stock of experience as certified
public accountant as to Outside Company Auditor respectively.
(Internal Auditing)
The Company has established the Audit Department as an internal auditing organization that is staffed by experts in the fields ofsales, purchasing, engineering, quality, production, etc. in order to upgrade internal controls in wide-ranging fields of work. The Audit
Department audits the Company, subsidiaries and affiliated companies at home and abroad to verify the state of compliance withlaws and regulations and the effectiveness of internal controls on a regular basis and reports to the Board of Directors and the Audit& Supervisory Board on the results together with proposals for improving the problems that were detected.
SUZUKI MOTOR CORPORATION 19

Corporate Governance Issues(Independent Auditor)
2 certified public accountants who engaged in the audit for FY2015 are Mr. Takashi Imamura and Mr. Koji Sato, who belong to Seimei
Audit Corporation. The numbers of other assistant members for audit are 9 certified public accountants and 6 others.
(Mutual cooperation of Internal Auditing, Auditor’s Audit and Independent Auditor, and relationship between these audits anddepartments of internal control)
Audit Department, Company Auditors and Independent Auditor cooperate appropriately and audit concerning compliance with laws, internal control and management efficiency from three different angles.
Company Auditors receive periodical reports from Independent Auditor such as on audit plans and results of quarter reviews, as well as
on situation of conducting fiscal auditing. Company Auditors trade comments and share information as necessary to strengthen cooperation, such as by conducting observation of Independent Auditor’s audit to comprehend situation of conducting auditing, while also
receiving reports on the efforts for quality management of auditing as an audit corporation.
Also, Company Auditors adjust audit plans and auditing themes with the Audit Department, attend its audit whenever necessary, and receive reports and explanation on all its audits.
Audit Department and Company Auditors exchange information with organization specialized in internal audit, which consists of Corporate Planning Office, Legal Department, Finance Department and IT Systems Department.

3. Function, role and status of Outside Director and Outside Company Auditor
The Company elected 2 Outside Directors and 3 Outside Company Auditors.
The Company elected Mr. Masakazu Iguchi as Outside Director to receive supervision of the Company from a neutral position andbeneficial advice related to the management of the Company in manufacturing industry based on a large stock of expertise as a doctor of engineering.
There are no special interest between him and the Company. The Company believes that he is sufficiently independent of the management of the Company. He is also in charge of a member of Advisory Committee on Personnel and Remuneration, etc.
The Company elected Mr. Sakutaro Tanino as Outside Director to receive supervision of the Company from a neutral position andbeneficial advice related to the management of the Company from the global viewpoints based on a large stock of experience andknowledge as a diplomat.
There are no special interest between him and the Company. The Company believes that he is sufficiently independent of the management of the Company. He is also in charge of a member of Advisory Committee on Personnel and Remuneration, etc.
The Company elected Mr. Norio Tanaka as Outside Company Auditor to receive audit of the Company from a neutral position, as wellas based on a large stock of the experiences and the professional knowledge as a certified public accountant.
There are no special interest between him and the Company. The Company believes that he is sufficiently independent of the management of the Company. He is also in charge of a member of Advisory Committee on Personnel and Remuneration, etc.
The Company elected Mr. Yasuhiro Yamazaki as Outside Company Auditor to receive audit of the Company from a neutral position,
based on the large stock of experience and knowledge that he acquired through performance of local administration and duties as
officers of third sectors for long years.
There are no special interest between him and the Company. The Company believes that he is sufficiently independent of the management of the Company.
The Company elected Mr. Nobuyuki Araki as Outside Company Auditor to receive audit of the Company from a neutral position, basedon the large stock of experience and expertise as doctor of engineering and other important offices such as in the field of academy/
environment.
There are no special interest between him and the Company. The Company believes that he is sufficiently independent of the management of the Company.
The Company concluded that all 5 members of Outside Director/Company Auditor have no possibility of causing conflict of interest
between them and shareholders, and filed them as independent director/auditor under the rules of the Tokyo Stock Exchange, Inc.
As to independence from the Company with regard to the election of Outside Director/Company Auditor, the Company judges their
independence under the below “Standard for Independence of Outside Directors and Outside Company Auditors” based on “Standardof judgment” set by Tokyo Stock Exchange, Inc.
Under the provisions of Paragraph 1, Article 427 of the Companies Act, the Company has entered into contracts with Outside Directors and Outside Company Auditors to limit their liability for damages arising from neglect of duties. The amount of the limit for liability for damages pursuant to such contracts shall be specified as the minimum amount specified by law.
<Standard for Independence of Outside Directors and Outside Company Auditors>
The Company never elects a person who falls under any of the followings as a candidate Outside Director or Outside Company Auditor in order to ensure the independence:
20 SUZUKI MOTOR CORPORATIONCorporate Governance Issues

1. Person concerned with the Company and its subsidiaries (“the Group”)(1) With regard to Outside Directors, any person who is or was a person executing business (Note 1) of the Group at present or in the past,(2) With regard to Outside Company Auditors, any person who is or was a Director, Managing Officer or employee of the Group at present or in the past, or(3) A spouse or a relative within the second degree of kinship of the present Director or Managing Officer of the Group.
2. Person concerned such as business partners or major shareholders, etc.
(1) Any person who is a person executing business of any of the followings:
1) A company of which major business partner is the Group (Note 2)2) A major business partner of the Group (Note 3)3) A major shareholder having 10% or more of total voting rights of the Company
4) A company for which the Group has 10% or more of total voting rights(2) A person who is or was a representative partner or a partner of the Group’s Independent Auditor at present or in the past
five years(3) A person who receives a large amount of remuneration from the Group other than remuneration for Director/Company Auditor (Note 4)(4) A person who receives a large amount of donation from the Group (Note 5)(5) A spouse or a relative within the second degree of kinship of the person who falls under category from (1) through (4) above
Notes 1. A person executing business:
		 A director executing business, a managing officer, an executive officer or an employee
2. A company of which major business partner is the Group:		 A company which belongs to the group of the business partner who receives 2% or more of its consolidated net sales in thelatest business year ended of the group from the Group in any of the business year in past three years
3. A major business partner of the Group:		 A company which belongs to the group of the business partner who makes payment 2% or more of the Group’s consolidated
net sales or provides the Group with 2% or more of loans of its consolidated total assets in the latest business year ended of
the Group in any of the business year in past three years
4. A person who receives a large amount of remuneration:
		 A consultant or legal or accounting expert who receives annual compensation of 10 million yen or more (for theorganization, 2% or more of its annual total revenues) in any of the business year in past three years
5. A person who receives a large amount of donation:
		 A person who receives annual donation of 10 million yen or more (for the organization, a person directly involvedin activities which is the purpose of the donation) in any of the business year in past three years

4. Development status of internal control system and risk management system
Followings are the basic policies regarding the systems to ensure the appropriateness of execution of duties (internal control systems), which were resolved at the meeting of Board of Directors of the Company.
Systems to ensure that Directors’ and employees’ execution of their duties complies with laws and regulations and the Articles of Incorporation
1) The Board of Directors shall formulate the “Suzuki Group Code of Conduct” to ensure Directors and Officers and employees in the
Company and the Group execute their duties in a healthy manner as well as shall oversee the state in which the Code is fully disseminated throughout the Group.
2) A corporate governance committee, chaired by the Officer in charge of corporate planning, shall be established under the Board of
Directors. The Corporate Governance Committee shall deploy measures for advancing in thorough compliance and promote efforts toaddress cross-sectional challenges in coordination with the relevant sections.
3) Executive General Managers shall clearly define the division of work among their responsible sections and establish work regulations
and manuals that include compliance with laws and regulations related to their responsible duties, approval and decision procedures,and rules for the confirmation process by other sections as well as make them fully known to people concerned.
4) The Human Resources Department shall hold seminars about compliance and individual laws/regulations for Directors, Officers andemployees in a continuous manner in cooperation with the Corporate Planning Office, Legal Department, Engineering Department
and other related departments.
5) To prevent violations of laws and regulation and take corrective measures at an early stage, a whistleblowing system (Suzuki Group Risk
Management Hotline) that has both internal and external contact points, shall be established to allow Directors, Officers and employees
to report on breach of laws and regulations or their possibility without any disadvantageous treatment to the whistleblower.
The Corporate Planning Office shall strive to make the whistleblowing system fully known and promote its use.

SUZUKI MOTOR CORPORATION 21

Corporate Governance Issues

Systems relating to the storage and administration of the information in relation to Directors’ execution of their duties
The minutes of the meetings of the Board of Directors and other information related to Directors’ execution of their duties shall be retained and administered by responsible sections pursuant to laws, regulations and internal regulations as well as shall be available to
Directors and Company Auditors for examination when the need arises.
Rules and other systems relating to management of the risk of loss
1) Important matters regarding corporate management shall be decided after the meetings of Board of Directors, the Executive Committee, circular resolutions and other systems deliberate and evaluate their risks in accordance with the standard for deliberation.
2) Executive General Managers shall establish work regulations and manuals that include preventive measures against risks that can bepresumed in their responsible duties, and counter-measures in case of their occurrence and disseminate them to people concerned.
3) To prepare for a large-scale disaster, action manuals and business continuity plans shall be formulated, and drills shall be carried out.
Systems to ensure that Directors’ execution of their duties is made efficiently
1) Important matters regarding corporate management shall be deliberated at the Executive Committee and other meetings prior todecision-making.
2) The Board of Directors shall clarify responsibilities regarding the execution of Managing Officers’ and Executive General Managers’ duties and supervise their execution.
3) The Board of Directors shall receive reporting from the person responsible for the execution of the duties, as necessary, on how thematters, which were decided at the meetings of the Board of Directors, the Executive Committee and other meetings, are executed
to give necessary instructions.
4) The Board of Directors shall formulate mid-term management plans that include consolidated subsidiaries and regularly verify the
progress in the business plans of the fiscal years that Executive General Managers make in order to achieve the mid-term plan.
5) The Audit Department, which directly reports to President, shall audit the state of establishment and operation of internal controls,
which are based on the basic policies, on a regular basis and report on the outcome to the Board of Directors.
The Board of Directors shall make Managing Officers and Executive General Managers, etc. attend meetings of Board of Directors, if
necessary, and ask them to explain or report on issues that were detected in activities such as internal audits and whistleblowing.
Accordingly, the Board of Directors shall give instructions for correction of the issues and ask reporting on the result.
Systems to ensure proper business operation of the Corporate Group consisting of the Company and subsidiaries
1) The Board of Directors shall formulate mid-term management plans that include consolidated subsidiaries, and the presidents of thesubsidiaries shall make business plans in the fiscal years in order to achieve the mid-term plans.
2) The Company shall set forth regulations for managing subsidiaries, which clarify the departments that are responsible for administering the subsidiaries, and receive reporting from subsidiaries on the situation of their business on a regular basis and on matters set
forth in the regulations. Important matters related to the corporate management of subsidiaries shall be subject to prior approval
from the Company.
3) The Corporate Governance Committee shall deploy thorough compliance and measures for risk management, which include consolidated subsidiaries, to the presidents of subsidiaries as well as give them necessary assistance in coordination with the relevant
departments.
The Audit Department, directly reporting to President, shall regularly audit the state of dissemination of the “Suzuki Group Code of
Conduct”, compliance, risk management and the state of establishment of a whistleblowing system as well as report the results to
the Board of Directors.
The Board of Directors shall make the presidents of subsidiaries attend meetings of Board of Directors, if necessary, and ask them toexplain or report on issues that were detected in activities such as internal audits and whistleblowing. Accordingly, the Board of Directors shall give instructions for correction of the issues and ask reporting on the result.
4) The Corporate Planning section shall disseminate the Suzuki Group Risk Management Hotline to subsidiaries to allow the Directors,
Officers and employees of subsidiaries to report directly to the Company on violations of laws and regulations or their possibility.

22 SUZUKI MOTOR CORPORATIONCorporate Governance Issues

Matters for employees to support duties of the Company Auditors when the Company Auditor seeks appointment of the employees, matters for independence of such employees from the Directors and matters for ensuring the efficiency of instructions
given the employees
1) The Company shall establish Secretariat of Audit & Supervisory Board in which staff is dedicated to executing their duties under the
direction of Company Auditors.
2) Company Auditors whom the Audit & Supervisory Board appoints can ask a change of their staff anytime, and Directors shall not refuse the requests without right reason.
3) Transfers, treatments, disciplinary punishments, etc. of the staff in the Secretariat of Audit & Supervisory Board shall be subject to approval from Company Auditors whom the Audit & Supervisory Board appoints. The staff’s performance assessment shall be conductedby Company Auditors whom the Audit & Supervisory Board appoints.
Systems for reporting to the Company Auditors
1) Company Auditors may attend the Executive Committee, other important meetings and various committees in addition to meetingsof Board of Directors to ask questions and express their opinions.
2) In additions to delivering circular resolutions and other important documents to Company Auditors, the Board of Directors, departments and the presidents of subsidiaries shall submit necessary information and report on the state of business and operations at
the request of Company Auditors.
3) On finding the fact that can cause serious damage to the Suzuki Group, the Board of Directors shall report on the fact to the Audit &Supervisory Board immediately.
4) The Audit Department, directly reporting to President, shall report on the results of internal audits to the Audit & Supervisory Board.
5) One of the contacts of the Suzuki Group Risk Management Hotline shall be Company Auditors. In addition, the state of whistleblowing
activities outside that of Company Auditors shall be reported to Company Auditors on a regular basis.
6) The Company will not treat those who reported to Company Auditors to their disadvantage and shall ask the subsidiaries to treat
them in the same way.
Matters regarding procedures for prepayment or redemption of expenses arising from the execution of duties of Company Auditors and processing of other expenses or liabilities arising from the execution of such duties
The Company shall budget a certain amount of fund each year to pay expenses, etc. caused by the execution of Company Auditors’ duties. When Company Auditors claim an advance payment of expenses and others related to the execution of their duties, the Company
shall treat the claim without delay.
Other System to ensure effecting auditing by the Company Auditors
Company Auditors may seek advice, etc. from lawyers and other external experts, if necessary, at the expense of the Company.

5. Remuneration for Directors and Company Auditors
Remuneration paid to Directors and Company Auditors is as follows:(Amount of remuneration: million yen, Number of payees: person)
Classification

Total amount of
remuneration

Basic
remuneration

Amount of each type of remuneration
RemunerationBonus
as the formof share acquisition

Stock
optionNumber ofpayeesDirectors(excluding Outside Directors)

331

271

―

40

19

9

Outside Directors

20

20

―

―

―

2

Total

352

292

―

40

19

11

Company Auditors(excluding Outside Company Auditors)

47

47

―

―

―

2

Outside Company Auditors

16

16

―

―

―

3

Total

63

63

―

―

―

5

SUZUKI MOTOR CORPORATION 23

Corporate Governance Issues

Notes: 1. The amount of remuneration limit for Directors (¥80 million per month) was resolved at the 135th Ordinary General Meetingof Shareholders held on 28 June, 2001. The amount of remuneration limit for Company Auditors (¥8 million per month) was
resolved at the 123rd Ordinary General Meeting of Shareholders held on 29 June, 1989. The maximum amount of remuneration
for Directors for stock options as compensation (¥170 million per year) was resolved at the 147th Ordinary General Meeting of
Shareholders held on 27 June, 2013 and 148th Ordinary General Meeting of Shareholders held on 27 June, 2014.
2. Regarding the “Bonus” column for Directors (not including Outside Directors): expenses of 210,000,000 yen had originallybeen appropriated for FY2015, based on the calculation methods linked to the Company’s performance for the fiscal year
given in “Policy on determining the amount of remuneration, etc. for Directors/Company Auditors.” However, it was later
discovered that there were cases of improper activities that were inconsistent with national regulations with regards to gas
emission and fuel consumption testing of the Company’s automobiles. As such, it was decided that the agenda item to pay
bonuses to the Directors would not be referred to the 150th Ordinary General Meeting of Shareholders to be held on June29, 2016.
3. The above-mentioned “remuneration as the form of share acquisition” is the amount recorded as expenses of FY2015, among
remuneration, etc. to be paid within the range of the amount of remuneration limit (monthly amount) approved at the General
Meeting of Shareholders.
4. The above-mentioned “stock options” is the amount recorded as expenses of FY2015, among the amount of remuneration forstock acquisition rights granted for stock options in FY2014.
5. The above includes two Directors who retired at the closure of the 149th Ordinary General Meeting of Shareholders held on 26
June 2015.
6. In addition to the above, ¥21 million was paid to two retired Directors as retirement benefits for Director under the resolution
at the 140th Ordinary General Meeting of Shareholders held on 29 June 2006.
Policy on determining the amount of remuneration, etc. for Directors/Company Auditors(Remuneration of Directors)
Remuneration of Directors (excluding Outside Directors) shall consist of basic remuneration for each position (fixed sum), bonus
linked to the Company’s performance of each fiscal year and stock-based remuneration linked to the Company’s mid- and longterm performance or stock price. Remuneration of Outside Directors shall be solely basic remuneration (at the fixed amount).
Also, remuneration of Directors shall be decided by the Board of Directors based on the deliberation results of the Advisory Committee on Personnel and Remuneration, etc., of which Outside Directors/Auditors make up the majority of the membership, on thepolicy regarding the decision of Director’s remuneration, standards, remuneration system and adequacy of the remuneration level.
The basic remuneration shall be within the range of the amount of remuneration limit (monthly amount) approved at a General
Meeting of Shareholders, and the amount of remuneration for each Director shall be determined and paid in consideration of theduties and responsibilities of each Director.
As for bonuses, a proposal based on the calculation method linked with the Company’s performance shall be submitted to an Ordinary General Meeting of Shareholders for approval and then paid.
The stock-based remuneration shall be paid within the range of amount of remuneration limit (monthly amount) approved at theGeneral Meeting of Shareholders, as the remuneration that is linked to mid-and long-term Company’s performance and stock price.
Directors shall contribute such type of remuneration to the officer stockholding association every month, acquire the Company’s
shares and continuously hold them during their term of office.
(Remuneration of Company Auditors)
Remuneration of Company Auditors shall be solely basic remuneration (at fixed amount), and the amount shall be decided and paidin the discussion among Company Auditors within the range of the amount of remuneration limit (monthly amount) approved at a
General Meeting of Shareholders.
(Reference)
Remuneration of Directors are calculated using a method based on points set for each position of Directors as per below.
As for the calculation method, the Company received a document that states that all Company Auditors agreed on appropriatenessof the method.

24 SUZUKI MOTOR CORPORATIONCorporate Governance Issues

1. Calculation method
Paid amount = Net income attributable to owners of the parent × 0.18% × Each Director’s point ÷ Total of Director’s point
Notes: 1. “Indexes on profits for such accounting period” stated in Article 34(1)(iii)(a) of Corporation Tax Act of Japan is “Net
income attributable to owners of the parent”.
2. Amount of above-mentioned “Net income attributable to owners of the parent” used in the method is an amount before
accounting loss of such paid remuneration amount.
3. Amount of net income attributable to owners of the parent multiplied by 0.18% is rounded down to the nearest million.
2. Number and point of Directors by position
Point

Number of Directors

Total Point

Chairman

30

1

30

Vice Chairman

18

1

18

President

22

1

22

Executive Vice President

18

­—

—

Directors

13

3

39

Total

―

6

109

Note: Above number is based on number of Directors as of 29 June, 2016.

3. Eligible person
Only Directors that apply to “Managing members” as stated in Article 34(1)(iii) of Corporation Tax Act of Japan, and excludes Outside Directors.
4. Fixed amount“Fixed amount” as stated in Article 34(1)(iii)(a)[1] of Corporation Tax Act of Japan is limited up to ¥300 million. If amount of net income attributable to owners of the parent multiplied by 0.18% exceeds ¥300 million, ¥300 million divided by each Director’s point
would become remuneration of each Director.
5. Others
Remuneration of Director retiring during the fiscal year would be decided by calculating amount of remuneration that would havebeen paid if expiring the full fiscal year, and dividing it by the actual service months (rounded down to the nearest 10,000).

6. Remuneration for Independent Auditor
FY2014FY2015

Remuneration based on
audit certification(millions of yen)

Remuneration based on
non-audit operation(millions of yen)

Remuneration based on
audit certification(millions of yen)

Remuneration based on
non-audit operation(millions of yen)

The Company

85

―

88

10

The Group

3

―

3

―

Total

88

―

91

10

Division* Because the remuneration amount for the audit under Companies Act of Japan and for the audit under Financial Instrument and Exchange Act of Japan is not divided in the
Auditing Agreement between the Company and Independent Auditor and is not be able to be actually divided, the amount described in the above specifies the total of these
remuneration amounts.

SUZUKI MOTOR CORPORATION 25

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 current consolidated fiscal year.

(1) Risk relating to markets- 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
rapid change in the economic situations may adversely affect the performance and financial conditions of the Group. Further, unexpected change or new application of tax systems, financial policies and others in each country may also adversely affect the performance and financial conditions of the Group.

- 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 globalized 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 business- New product development and launching abilities

It is very important for an automobile and motorcycle manufacturer to grasp correctly the customer needs and environment surrounding cars 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 therapid spread of cars 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.

- 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 positions of 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.

- 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 ventureswith local companies in accordance with local laws or other requirements. These businesses are restricted by various legal and otherregulations in each country (including those related to tax, tariff, overseas investment and fund transfer to the home country). Anychanges to such regulations, or management policies or management environment of the joint venture partners may adversely affectthe performance and financial conditions of the Group.

- 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 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 decentralization of production sites to optimize 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 the Group. On the other hand, by transferring production sites to other countries, it may result in opportunity losses that the
26 SUZUKI MOTOR CORPORATION

Risks in Operations

Group can no longer 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.

- 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
be revised, 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
Group is 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 conditions of the Group.

- 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.

- 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 thealliance partners may adversely affect the performance and financial conditions of the Group.

- 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.

- 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 authorization
attributable to unexpected circumstances, the Group may be subject to legal demand, lawsuit, indemnity liability and obligation to pay
a fine, and this may adversely affect the performance and financial conditions of the Group.

- 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.

- Protection of intellectual property
We have stocked intellectual property such as technology and knowhow to distinguish its products with those of competitors, andhave taken measures to protect such property and to prevent infringement of intellectual property rights by a third party. Nonetheless,if the Group’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 affect the performance and financial conditions of the Group.

- 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.

- 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 minimize the influences ofdamage by natural disasters such as Tokai and Tonankai Earthquake. But, occurrences of any Tokai and Tonankai Earthquake may adversely affect the 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 andsocial 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
the risks of the Group.
SUZUKI MOTOR CORPORATION 27

The Status of the Corporate GroupThe Status of the Corporate GroupThe outline of the corporate group
The corporate group of the Company consists of subsidiaries of 136 companies and affiliates of 33. The
main businesses are manufacturing and marketing of automobiles, motorcycles, marine & power products,
motorized wheelchairs, electro senior vehicles and houses, 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

Marine and Power products, etc.

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 othermarketing companies throughout the market, and in overseas
markets, by a subsidiary, Suzuki Deutschland GmbH and othermarketing companies and manufacturing & marketing companies. The business of logistics services is conducted by a subsidiary, Suzuki Transportation & Packing Co., Ltd.

Outboard motors are manufactured mainly by the Company andmarketed by a subsidiary, Suzuki Marine Co., Ltd. and others.
In the domestic market, the marketing of motorized 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 BusinessCo., Ltd.

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

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

No marks : Subsidiaries: Affiliates

Magyar Suzuki Corporation Ltd.

Flow of services

Maruti Suzuki India Ltd.
Suzuki Motor Gujarat Private Ltd.

A /M : Automobile
M/C : Motorcycle
M/P : Marine and Power products, etc.

A/M M/C M/P○○○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.

Domestic Manufacturing Companies A/M M/C M/PSuzuki Auto Parts Mfg. Co., Ltd.
Snic Co., Ltd.
Suzuki Toyama Auto Parts Mfg Co., Ltd.

○

○

○

○

○

○

○

Suzuki Transportation& Packaging Co., Ltd.

○

○

○

○

○

Suzuki Motor de Colombia S.A.

○

☆ Chongqing Changan
Suzuki Automobile Co., Ltd.

○☆ Jiangxi Changhe Suzuki
Automobile Co., Ltd.

○

Overseas Marketing Companies
Suzuki Deutschland GmbH
Suzuki GB PLC
Suzuki Italia S.p.A.

A/M M/C M/P○○Suzuki France S.A.S.
Logistic Services○

Suzuki Manufacturing ofAmerica Corp.

☆ Jinan Qingqi Suzuki
Motorcycle Co., Ltd.

○The Company☆ Hamana Parts Industry Co., Ltd.

○

○

○

Suzuki Motor Iberica, S.A.U.
Suzuki Austria Automobil Handels GmbH
Suzuki Finance Europe B.V.
Suzuki Motor of America, Inc.
Suzuki Australia Pty. Ltd.
Suzuki Motor de Mexico, S.A. de C.V.

Domestic Marketing Companies

Suzuki Motor Sales Hamamatsu Inc.
Suzuki Motor Sales Kinki Inc.

A/M M/C M/P
○

○

○

○

○

○

○

○

○
○

○

○

○

○

Other Domestic Companies
Suzuki Business Co., Ltd.

○

○

○

○

○

○

○

○

○

○

○

A/M M/C M/P
○

○

○
○

○

Suzuki Marine Co., Ltd.
Suzuki Finance Co., Ltd.

○○

Suzuki Motorcycle Sales Inc.
Suzuki Motor Sales Tokyo Inc.

○

Dealers and Customers

Overseas Manufacturing &Marketing Companies

Flow of products, parts○

A/M M/C M/P○○○

SUZUKI MOTOR CORPORATION 29

ANNUAL REPORT 2016
Printed in Japan