NewUsed

Find by category:

Exhaust Notes

Suzuki quitting U.S. market, declares bankruptcy

Going forward, the American division will sell only motorcycles, ATVs and marine engines.

By Clifford Atiyeh Nov 6, 2012 5:05AM
Suzuki is pulling out of the U.S. market and declaring bankruptcy for its American automotive division, the company said Monday evening.

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.

[Source: Suzuki]


204Comments
Nov 6, 2012 8:03AM
avatar
Should have brought back the Samurai and the Sidekick ..two of the most popular vehicles Suzuki ever produced. I think there is a market for a lower price convertible jeep type vehicle. But hey what do I know???
Nov 6, 2012 7:19AM
avatar
I wonder how long before Mitsubishi follows suit...
Nov 6, 2012 8:06AM
avatar

How can you sell a car named" KIZASHI" in the US. Might as well named it  "BANZAI " !

Nov 6, 2012 8:00AM
avatar
The Japanese government won't prop them up?
Nov 6, 2012 8:21AM
avatar
I have a 20-year old Suzuki Sidekick that I bought for about $10,500 and have put less than $5,000 in repairs into it in those 20 years. I know a guy who has a 19-year old Sidekick. It's too bad they're taking such reliable vehicles off the market. Of course, the fact that they are so reliable is probably part of the problem since people like me haven't had to buy another vehicle in 20 years.
Nov 6, 2012 7:38AM
avatar

mrchriss:  

I saw the headline and had the exact same thought!  You beat me to it!   I'd give them 18 months.

Nov 6, 2012 8:37AM
avatar
I've never been a car person. Always drove Trucks or SUV's. Kizashi got great reviews so I test drove it. I love this car. So many options, great handling, fun to drive, quality materials. Feels like an audi or acura.I also get compliments. Im on 2 years and have not had a single issue with it. Car has held up nicely. I also like it because you dont see one of them on every street corner. Too bad Suzuki didnt offer more choices that were equivalent to this excellent Kizashi.  As for Mitsubish, I had a Mirage in the early 90's. That thing hit over 100k miles with no problems until someone t boned it. I appreciate a car that doesnt require a lot of upkeep and expensive maintenance.
Nov 6, 2012 8:16AM
avatar
too bad, I had a 1994 Sidekick 4 dr that i sold finally in 2008. Great little basic SUV.
Nov 6, 2012 8:11AM
avatar
What a shame.  I bought a Forenza a few years back and its been the most reliable, comfortable car I ever bought on my meager automobile budget.  I have friends who also drive Forenzas and Grand Vitaras and they are all very happy with their Suzuki cars.
Nov 6, 2012 8:36AM
avatar

I worked for a saturn dealer as a journeyman tech for over 12 years that switched to suzuki after saturn went bye bye on halloween of 2009. they couldn't get any other dealership franchise and chose suzuki as a last alternative.they were bastards anyway.what goes around comes around.

Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?
MSN Money

ABOUT EXHAUST NOTES

Cars are cool, and here at MSN Autos we love everything about them, but we also know they're more than simply speed and style: a car is an essential tool, a much-needed accessory to help you get through your day-to-day life. What you drive is also one of the most important investments you can make, so we'll help you navigate your way through the car buying and ownership experiences. We strive to be your daily destination for news, notes, tips and tricks from across the automotive world. So whether it's through original content from our world-class journalists or the latest buzz from the far corners of the Web, Exhaust Notes helps you make sense of your automotive world.

Have a story idea? Tip us off at exhaustnotes@live.com.