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Info on Kawasaki/Suzuki alliance

Published June 6th, 2002

Here is more info provided by Bob Moffit of Kawasaki USA



Bob: We are of course aware there has been some talk about the arrangement between Kawasaki and Suzuki. Our relationship with Suzuki is an alliance. It is not a merger. There has been no exchange of equity between the two companies. It’s a relationship of co-operation based on three areas.



One area is the procurement of components for production. We purchase hundreds of millions of dollars of production parts. Items like tires, fasteners, components, and lighting. Components that can be used commonly.



If thru our combined purchasing power we can negotiate and save even a small percentage with vendors and suppliers, you can see that’s potentially a tremendous amount.



The second area is individual model lines for each company. Is there anything that one can do for the other? We are releasing some models soon that are alliance models. The new KLX 125 is a perfect example. Likewise, down the road Suzuki will release products of the alliance. We are supplying each other with products to help fill out our respective model lines. It will make us more competitive all across the full spectrum of motorcycling.



The third aspect of the alliance is in the future, and that involves the possibility of joint development. We would agree to work jointly in development of certain models. It’s hard to address that fully because it’s in the future, but the overall principal can be understood.



There is no plan for any models to be eliminated. We will continue to market separately and aggressively. There is no co-ordination of marketing or dealerships. It isn’t a financial arrangement of any kind between the two companies.



Many are aware of the numerous examples of inter-company agreements in the automotive industry alliances, such as that involving Honda and Isuzu. That certainly wasn’t a merger, but a product sharing arrangement. In Honda’s case, it appeared as though they wanted to enter a market that they weren’t yet ready to undertake themselves, unless they procured a product from another. Although I am unsure how these companies characterized their relationship at that time, it could be seen as a form of alliance. It’s been done many times in the automotive industry, but this happens to be the first one in the motorcycle industry.





Bob: “Why does Kawasaki make such a large investment in racing?” We ask ourselves that question. Any prudent company would. We’ve studied it. We’ve asked for input from virtually every department within the company, and the agencies we work with. We’ve looked at that question in depth over the years.



A question was asked ‘Does what wins on Sunday sell on Monday?’. To a certain extent, yes, it does. But not always. We do spend a great deal of resources on racing. We don’t race just to win or sell motorcycles. Is winning races enough? No, it’s not enough. We race because we want the products to be superior in every way they can be.



We use racing as a testing and development foundation for making our products better. Every vehicle company that we’ve studied feels the same way. There is no better way to prove and improve your product than to stress it under racing conditions.



[img1] Good product guarantees sales, and positive evaluation by the media. You are not going to evaluate our company on how many races we win, but rather how our product performs for you.



So, the answer is twofold – we have to win races, and we have to make a good product.





You can see photos of the 2003 KX 125 and 250 at this link












Info on Kawasaki/Suzuki alliance - Photo 1 of 1
Bob Moffit and Mel Moore with the ’03 KX 250


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