Of all the companies that make up the global automotive industry, it was the Japanese that gained an early and convincing reputation for an ability to consistently build vehicles continents away from their homeland factories, and to do so at comparable levels of quality and production.
Small-car specialist Suzuki is one of them, building at its Esztergom plant near Budapest, Hungary, three of its own models (Swift hatchback, SX4 SUV, and Splash ultracompact MPV), plus General Motors Europe's Opel/Vauxhall Agilas (rebadged Splash) and Fiat Sedici (closely based on the SX4). Suzuki has been producing models for GME for 11 years and for Fiat for three years.
Before the global downturn, Magyar Suzuki Corp. (MSC) produced 281,686 units in 2008, up 21% from 2007. Because of the subsequent economic reverses, the figure for 2009 will be about 180,000, but the company is preparing to surge ahead as fiscal recovery becomes a reality. Ultimate capacity of the plant is about 300,000 units per annum.
Described as the world’s ninth largest auto manufacturer (its manufacturing range also includes motorcycles, marine products, outboard motors, and other product powered by small internal-combustion engines), Suzuki has 36 major overseas auto businesses in 23 countries. In 2008, it produced 2.4 million automobiles and 3.3 million motorcycles globally.
The company opted to use Hungary as a manufacturing center for Europe and Russia following the radical political changes triggered in 1989 that were to transform Eastern Europe. At that time, manpower in the former Eastern Bloc countries was notably cheaper than in other parts of Europe. This, plus Hungary’s geographical location, convinced Suzuki to establish a factory there. Initially, the capacity target was 50,000 units per annum after five years’ production.
Going on stream in 1992, the plant's output grew steadily, said MSC’s current Plant Director, Gyula Novak (who has worked at the factory since its inception), to achieve the 2008 figure.
While the plant remains relatively labor-intensive, pay rates have risen in Eastern Europe over the past two decades and there has been an increase in the plant’s robot population, although no reduction has been made in the workforce of 4400 people. During summer shutdown this year, an additional 90 robots manufactured by Fanuc, were installed in the welding shop, bringing the total population to about 700. Automated welding is used for 100% of Splash production, 91% of SX4 production, and 72% of Swift production.
“Suzuki is a company that has a continuous quality improvement philosophy based on people and does not use full automation,” said Novak. “Our people observe the guiding principles of the company and its processes, and from those, ideas for improvements come naturally. We believe there is no plateau for improvement; it is possible to just go on improving. Our people are always thinking about how production can be improved and money saved—and that brings motivation.”
In the first stages of manufacture, including welding, there are three production lines in place. Later, they cohere into one, down which three-door, five-door, left-hand-drive, and right-hand-drive models pass.
Engines are brought in from Japan, France (supplied by PSA Peugeot Citroën), Poland (Fiat), and India (a joint Fiat-Suzuki development) almost fully built up, although some components are sourced from Hungarian and wider European suppliers. These components include wiring harnesses, starters, and alternators, which are fitted on a subassembly line. Eight different engines are installed in the cars produced in Hungary.
Quality benchmarking is against Suzuki’s Number 2 Plant in Japan.
Recruiting is not a problem for the level of staff required at MSC. They are taught the Suzuki production system, the learning process of which takes about a year. Said Novak: “We prefer to train them, to mold them to what we require, rather than recruit engineers trained by other companies. We send some to our Japanese plants to study on-the-job manufacturing and Kaizen application.”
Hisashi Takeuchi, CEO of Magyar Suzuki, said a vehicle was leaving the production line every 63 s, about the same rate as that from the company’s Japanese plants and close to twice the output of the European industry average.
Although the output from Esztergom has been reduced this year, there has been no reduction in the labor force and the company is confident that the demand for small cars will increase with economic recovery.
Suzuki’s initial car, the Suzulight, was introduced in Japan in 1955 and its first major model success was the 1970s version of the Alto, a name that the company continues to use. A 1.0-L three-cylinder gasoline engine powers the most environmentally effective member of the current Alto range, emitting only 103g/km of CO2.