Osamu Suzuki, the longest-serving head of any major global automaker, ceded his title as president of Suzuki Motor Corp. to his son, Toshihiro Suzuki, after leading the company for 37 years.
Toshihiro Suzuki, 56, became president on Tuesday and will concentrate on executing strategy set by the board, which will be headed by Osamu Suzuki, 85. The elder Suzuki will stay on as chairman and chief executive officer.
Suzuki’s new president will have to safeguard the company’s dominance in India, its biggest market, where Nissan Motor Co. and Honda Motor Co. are wooing customers with low-priced models. He’ll also be tasked with steering the company as it emerges from years of arbitration with Germany’s Volkswagen AG, Suzuki’s biggest shareholder, over a failed partnership brokered in 2009.
“I wanted to wait until the arbitration with VW to finish, but the time has been so long that I’m puzzled,” Osamu Suzuki told reporters at a briefing in Tokyo on Tuesday. “So I decided not to wait and announced the management change.”
Suzuki fell as much as 5.2 percent to 3,921.5 yen as of 9:25 a.m. Wednesday in Tokyo, while Japan’s benchmark Topix index was little changed.
Koichi Sugimoto, an analyst at Mitsubishi UFJ Morgan Stanley Securities Co., said in a report that there appeared to be no progress on dissolving Suzuki’s alliance with Volkswagen, which might disappoint investors who had expected a buyback of the German carmaker’s 19.9 stake in Suzuki. He rates the shares underweight, or sell.
The elder Suzuki will continue to be responsible for the arbitration with Volkswagen. The two carmakers’ goal was to cooperate on small, fuel-efficient cars for emerging markets, but relations soured as each side accused the other of breaching the agreement, and they entered into arbitration in November 2011.
Suzuki said last week that the arbitration proceedings have concluded, and the companies are now awaiting the arbitrators’ ruling on the Japanese carmaker’s effort to force VW to sell back its stake.
The announcement of the new president eases uncertainty about management succession at Suzuki, where Osamu Suzuki has served as either chairman, president or CEO since 1978.
“Toshihiro’s promotion has cleared clouds hanging over Suzuki,” said Satoru Takada, an analyst at TIW Inc. “Power succession has been an issue for Suzuki for years. They had to give their answer sometime soon.”
Osamu Suzuki was born Osamu Matsuda but married into the carmaker’s founding family and took his wife’s last name. In 2011, he promoted four of his lieutenants to the level of executive vice president. Toshihiro Suzuki is among the four, heading the company’s overseas business.
Two of the other three executives, Yasuhito Harayama and Osamu Honda, have been named vice chairman and chief technology officer, respectively.