AUTO INDUSTRY NEWS

Suzuki pulls out of China because market wants big cars

Suzuki pulls out of China because market wants big cars image

Vince Pornelos / Manufacturer Press | September 05, 2018 15:40

Changan Suzuki to be 100% owned by Changan

It's no secret that every single automaker in the world wants to get a bigger piece of the Chinese pie (or mooncake). The trend is so clear that companies such as BMW and Mercedes are even willing to engineer long wheelbase versions of their existing models just to cater to the Chinese market's desire for larger vehicles.

But what's an automaker to do if they specialize on small cars?

The answer, it seems, is clear for Suzuki: pull out.

Suzuki Motor Corporation has announced that they are pulling out of the Chinese market and selling all their equity in their operations there to their partner: Changan.

"Approximately 25 years ago, we launched the Alto in China, and since then we have made efforts in cultivating the Chinese market," said Mr. Osamu Suzuki, chairman of Suzuki Motor Corporation. "However, due partly to shifting of Chinese market to larger vehicles, we have decided to transfer all equity to Changan Automobile."

To operate in China, carmakers strike up partnerships with domestic automakers, in this case Changan. The transfer of the equity means that the company will become a wholly-owned subsidiary of Changan. 

The Suzuki brand will actually still remain in China, but will be operated entirely by Changan with locally-produced models licensed from Suzuki. The president of Changan Suzuki, presumably assigned from Suzuki in Japan, will resign. 

Suzuki says the transfer of equity will complete upon completion of legal proceedings in China.