Suzuki quitting U.S. market, declares bankruptcy
Going forward, the American division will sell only motorcycles, ATVs and marine engines.
The announcement comes with little surprise, as the fledgling Japanese automaker has taken significant staff cuts, forced buyouts on its dealerships, and struggled to sell barely 2,000 cars a month within the past year.
"Following a thorough review of our current position and future opportunities in the U.S. automotive market, we have made the difficult but necessary decision to wind down and discontinue new automobile sales in the continental U.S.," said Takashi Iwatsuki, chairman of American Suzuki Motor Co., in a letter on the company's website.
All new-car warranties will be honored, and Suzuki will continue to supply new parts for the next several years, the company said. While some of the 220 remaining Suzuki car dealerships may be kept open for parts and service, it's likely most will be liquidated. However, the company said it would continue to sell its full line of motorcycles, ATVs and marine engines and fulfill orders from those dealerships. Suzuki did not give an ultimatum on when it would stop selling or importing cars.
The company, which reported combined net losses of $94.7 million in both its 2011 and 2012 fiscal years, has an outstanding debt of $346 million. Facing a strong yen and lacking any North American production plants -- unlike nearly all of its Japanese and Korean competitors -- Suzuki had found it difficult to be profitable at such small volumes, citing problems with currency exchange rates and a U.S. lineup limited to "primarily small cars."
Aside from its newest Kizashi midsize sedan, most of Suzuki's four-model lineup has been criticized for being stale and largely uncompetitive. Months earlier, Suzuki had said it would introduce a refreshed SX4 sedan and hatchback, plus an updated Grand Vitara, this fall. However, as of August, no new model introductions were planned until at least 2015, and the company never imported the latest Swift model sold in Mexico and Europe. Suzuki's operations in Mexico and Canada remain unaffected.
Since 2005, the number of Suzuki dealerships has dropped steadily each year, either through buyouts or extraordinarily low sales. As of April, more than half of the remaining dealerships sold five or fewer cars per month, according to Automotive News. Annual sales declined 74 percent from 2007 to 2011; Suzuki sold just under 27,000 cars last year and just under 22,000 cars through October 2012.
While the company had a rocky start after settling into California in 1985 -- triggered by Consumer Reports publishing photos of a Suzuki Samurai tipping over in a handling test in 1988 -- Suzuki was never a large U.S. player. Many American buyers lapped up the Suzuki Sidekick in the 1990s, when it was one of the few compact SUVs on the market. The company's best years came in 2006 and 2007, when it sold more than 100,000 cars, although the company fell short of a 2003 goal to hit 200,000 annual sales, according to Automotive News.
Elsewhere in the world, Suzuki cars sell in far greater numbers, particularly in India, which accounted for 40 percent of its 2.49 million annual sales last year, according to Bloomberg. Suzuki is planning to build a sixth plant in India next year.
You know, I think Ford may drop Lincoln.
Their products don't look real saleable to me......
Shame, too -- I used to love the Marks and some of the Town Cars.
I saw the headline and had the exact same thought! You beat me to it! I'd give them 18 months.
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