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Suzuki, Kawasaki to Reduce Alliance Sales

July 28, 2005
Filed under Features

Japan’s Kawasaki Heavy Industries Ltd. and Suzuki Motor Corporation have altered a business relationship the two companies formed in August 2001 to help in parts sourcing, platform production of OEM units, and joint development of new products.
Kawasaki and Suzuki say the so-called “alliance” will now focus on potential exchanges of indirect resources, rather than on direct OEM product exchanges. In short, they plan to discontinue the practice of sharing models and likely focus on the procurement of parts and raw materials.
As a result, the following models will not be available from Kawasaki, effective with the 2007 model year: KLX125A/B; KSF80A; KSF50A; and KDX50A. The KSF400A will still be produced for model year 2007.
For Suzuki, the following models will not be available for the 2006 model year: RM65; DR-Z110; LT-V700F; M95; and the QUV product. The RM-Z250 will be produced for 2006. Since the RM-Z250 is a jointly developed unit, Suzuki and Kawasaki may introduce their own versions of this model with features not being commonly used on both of the Suzuki and Kawasaki models.
“Over these three years, we investigated many factors such as profitability, sales volume, customer reaction, influence on brand images, competitiveness of each OEM product,” Suzuki said in a prepared statement sent to dealers.
“After much discussion followed by careful investigation, we have decided to discontinue the sale of these OEM products. Discontinuing the OEM products business gives us the opportunity to focus on developing Suzuki’s own-design product with Suzuki character and brand image.”
“Achieving significant savings in development resources was a primary goal of the relationship with SMC, and having done that, KHI is in a stronger position for investment spending against future product introductions,” Kawasaki said in a prepared statement.
A Suzuki spokesman said the program of selling the same machine with two different brands seemed to cause more problems and confusion for dealers than it did for consumers.
“This way, our dealers can focus on our brands,” he said.
Both companies say the alliance will be reviewed on a regular basis.

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