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Yuriko Koike
Posted: Mon, Feb 15 2010. 8:44 PM IST
Suzuki and strategic
allianceFor India and Japan, there is life beyond love forcars. They have convergent geopolitical interests
too
Illustration: Jayachandran / MKint
Print
The name Suzuki is the most popular surname in Japan and the brand name of
the most popular car in India. Suzuki has a market share of 55.6% in the compact
and midsize car market in India, whose middle class, car purchasing public,
accounts for 200-300 million of the countrys 1.15 billion people.
For a long time, Indians
have used bicycle
rickshaws or
autorickshaws for daily
transportation. The
word rickshaw
originates from the
Japanese word
j inrik isha, which
literally means human-
powered vehicle. Thefact that Suzuki is now
practically synonymous
with automobile in
India suggests how close the relationship between the two countries can be.
Indeed, India and Japan are natural allies. Their strategic interests are almost
perfectly aligned, and each shares a desire to stabilize and preserve Asias balance
of power. So it is no surprise that Japan is pushing to develop closer economic
and strategic ties with India.
Suzuki Motor Corp. first entered the Indian market in 1982, when it started a joint
venture with Maruti Udyog Ltd, an Indian state-owned firm. Despite many ups anddownsand fierce competition from other major automobile manufacturers,
including the Indian giant Tata Motors LtdSuzuki succeeded in establishing its
brand as Indias peoples car.
Currently, Maruti Suzuki India Ltd has at least 4,000 employees and a nationwide
sales network of 337 dealers with 8,600 salespersons. The company is planning to
build a new factory in 2011, with a production capacity of 300,000 cars per year
for a market expected to reach two million in sales this year.
The reason why Suzuki entered the Indian market is clear. Suzuki chose an
untapped market while Japans bigger auto makersToyota, Nissan, and Honda
engaged in fierce competition within Japan. Osamu Suzuki, CEO and COO of thecompany (and a grandson-in-law of its founder), is a creative decision-maker, a
maverick who considers himself an old man in a mom-and-pop company that
concentrated most of its resources on producing motorcycles and light motor
vehicles. Yet when he decided to diversify and focus on India, many criticized him
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as being reckless, because India was so unfamiliar to Japanese companies.
Indeed, while there are currently at least 19,000 Japanese companies in the
Chinese market, there are only about 260 in India.
Suzukis decision to enter the Indian market turned out to be a resoundingly wise
choice. Japans population peaked in 2004 and is now falling, while its younger
generations show diminishing interest in automobiles. In the past, young Japanese
were proud of their knowledge about cars, and every teenage boy knew which
model would attract the most girls. Today, however, Japanese driving schoolssuffer from a fall-off in students, which cannot be explained solely by declining
population.
India s population, on the other hand, is increasing dramatically in the absence of
a one-child policy, such as exists in China. It makes sense, then, that Japanese
companies should head to the expanding Indian market.
Doing so, moreover, makes geo-strategic sense as well, with successive Japanese
governments increasingly regarding India as a vital diplomatic and political
partner. For example, in August 2007, then prime minister Shinzo Abe headed a
big delegation to India, followed by an official visit in December by current Prime
Minister Yukio Hatoyama.
The Strategic and Global Partnership between Japan and India, established in
2006, rests on the recognition that Japan and India share common values and
interests, as they are the two major entrenched democratic countries in Asia.
These shared values distinguish the Japan-India relationship from Japans
relationship with China. The growing congruence of strategic interests led to the
2008 Japan-India security agreement, a significant milestone in building a stable
geopolitical order in Asia.
A constellation of Asian democracies l inked by strategic cooperation and common
interests is becoming critical to ensuring equilibrium at a time when Asias security
challenges are mounting due to the shift in global economic and political powerfrom west to east. The emerging Japan-India partnership looks l ike a necessary
foundation for pan-Asian security in the 21st century.
The key point today is that the governments in both India and Japan are keen on
developing their strategic consensus about Asias future, a fact underscored by the
many bilateral discussions between defence and military officials of both countries
that are taking place. These discussions include joint initiatives on maritime
security, counterterrorism, weapons proliferation, disaster prevention and
management, and energy security.
More is needed. India and Japan should, for example, jointly develop new defence
capacities. Today, India and Japan cooperate on missile defence in partnershipwith Israel and the US. Bilateral efforts should also be launched to develop other
defence technologies. Suzukis joint venture in India suggests that cooperation in
high-tech manufacturing is eminently possible.
Suzukis success is a powerful precedent not only for other Japanese companies
that are looking at the Indian market, but also for further deepening cooperation
between the two countries. Osamu Suzuki may not be will ing to share all of the
secrets of his success with his competitors, but they and Japanese diplomats
should be studying the Suzuki method. Japans economy and Asian security
depend on its replication.
2 0 1 0 / PROJECT SYNDI CATE
Yuriko Koike is a former minister of defence and minister of the environment of
Japan, and was her countrys first ever national security adviser. Comment at
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