Suzuki Motorcycles – Rise, Fall and Comeback Story

The SUZUKI Car Company has been largely credited for having brought in an automobile revolution to India. What started as a small scale joint venture with Matuti has now evolved into the India’s largest car manufacturing company.

But unfortunately their counterpart SUZUKI Motorcycle company never really enjoyed that much success in India. There was a time when their business looked all set and rocking, and then there were times when it was in a major crisis. And finally they had to pack off their bags and quit unceremoniously only to come back again 5 years Later.

WHERE THERE IS RISE, THERE IS A FALL- Well that seems to be the exact case in the 17year old joint venture between TVS and Suzuki.In 1984, Suzuki came together with TVS for the production of 100cc motorcycles under the name of Ind-Suzuki.

Subsequently in the moped division was bought by Ind Suzuki Motorcycles in 1987 and the company changed its name to TVS Suzuki Ltd. Suzuki was to provide technical assistance to TVS. Even though TVS had a wide range of products for offering including mopeds, scooters and motorcycles, the Suzuki collaboration was for the Motorcycles only. Soon sales started to pick up and the models were an instant hit.

The Max-100 motorcycles were very much success and reliable, so much that these motorcycles formed a base for further development of products for the company. In late 1990’s the company posted losses for the first time. Automobile analysts remarked TVS Suzuki’s products lagged behind in performance and fuel efficiency when compared to the other companies. A year later company lockout due to labor problems and it got a ‘practically sick company’ image. In 1992, a turnaround strategy was formulated. TVS-Suzuki then introduced five new models all of sudden which including Supra, Supra SS, Shogun, Samurai and Shaolin, which was India’s first 5speed 140cc motorcycle.

Aggressive marketing strategies were used and Special attention to skill development of managers, sales officers and service engineers were given. Number of Dealership outlets was reduced from 400 to 250. The move off and the company succeeded in making a turnover of Rs. 4.1billion and a net profit of Rs.300 million in the year 1994. It was a remarkable road of recovery. Soon the company rose to sparkling heights and was in close competition with Hero Honda. TVS-Suzuki was now India’s Second Largest two wheeler manufacturing company. Somewhere in the midst of the turnaround, Differences between the two surfaced up.

TVS accused Suzuki of creating roadblocks in the management and also strongly resisted the launch of Samurai and Shogun, both of which proved to be successful. Moreover Suzuki refused TVS, more funds and technology for new models to keep in pace with the competition.” Everything without exception had to be approved by Suzuki” said a TVS spokesman. “Joint ventures are like long-term friendships. They go through ups and downs.

Changes in circumstances and expectations may cause tensions in the joint venture. But if you have a robust working relationship, whatever be the tension, you don’t go and shout from the rooftops. You keep negotiating, fighting internally, hammering it out and finally arrive at something that both can live with.” said Mr Venu Srinivasan, Managing Director of TVS-Suzuki, in an interview for Business Line, in 1996, when asked about his experience of working in a joint venture and reports of tension among the partners.

Soon the official version came out in public. It is said that Suzuki Demands were VETO Rights over aspects of management and in Decision-making process, Restrictions on Exports, Conditions to restrict use of Local Components, Compulsory Import of all Dyes and Capital equipments from Suzuki and Payment of Royalty for an indefinite period. TVS Straight-away resisted all of these demands. The Government decided not to interfere in the issue and soon TVS-Suzuki witnessed Huge Decline in sales. The Indian Motorcycle segment shifted four stroke models and TVS-Suzuki lost out on Huge Demand.

Then Suzuki expressed desire to increase the Equity holding and in August, 2001 they entered an agreement with Kawasaki for Product Development, Design Engineering and Manufacturing. TVS saw this as a direct conflict of interest. And finally in September, 2001 TVS-SUZUKI announced their breakup. TVS bought the 25.97% stake of Suzuki for Rs.90 million, increasing its stake to 58.43%. The stylish 150ccc Fiero was the last product of TVS-Suzuki. It was a celebration time for other companies as the company with Suzuki’s omission didn’t seem to head anywhere and TVS will prove to be a weaker company in the years ahead.

The Suzuki Motorcycles abandoned all its operations and left the country only to renter India five years later. From there on, they have been on a slow and steady course and are working towards building a good company image. Maybe the fact that Suzuki brand has a major customer recall as a car maker could help in bringing customers to its showroom.

Recently they launched a wide array of their international motorcycles including the prestigious Hayabusa, Gixxer 1000 and Bandit. As of 2010, the company seems to travelling on a positive track and has seven products on the offering. Looks like Time has changed for them now, But before that they will have to face the heat from Hero Honda and Bajaj, top two manufacturers in the country, not to mention their old friend TVS who are now third on that list.

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