Japanese automaker, Suzuki Motor Corporation, could exit China- the world’s largest auto market –given the low sales volume of small passenger cars, a segment Suzuki specializes in. Suzuki is mulling to end its partnership with Chinese car-maker Changan Automobile Co. as revealed by industry sources in Japan and China.
Although China is the world’s largest auto market, Suzuki’s decision to end the partnership is due to slumping sales, an outcome of consumer’s buying preference. While Suzuki specializes in making compact cars, Chinese consumers favor large vehicles as evident through sales data.
Even if buyers go for a compact vehicle, they prefer home grown brand, which is relatively cheap. The Japanese automaker is carefully contemplating the option of exiting the country as once out, it would be difficult to re-enter, the sources said.
Called the Chongqing Changan Suzuki Automobile Co., the joint venture between Suzuki Motor Corporation and Changan Automobile Co. has been struggling to find good sales numbers. New vehicle sales in 2017 plunged 28 percent from the year earlier to around 79,000.
One option on cards is that the joint company is disbanded and Changan Automobile continues to manufacture Suzuki brand vehicles under license. News18