Suzuki Exits U.S. Auto Business
Chapter 11 bankruptcy brings end to auto sales; focus shifts to motorcycles, all-terrain vehicles and boats in the U.S.
(From Edmunds.com)
Suzuki Motor Corp.’s withdrawal from the U.S. automobile business is expected to benefit Kia and Nissan, the two brands most shopped against Suzuki vehicles on Edmunds.com.
Suzuki on Monday announced that it will use a Chapter 11 bankruptcy filing by its U.S. subsidiary in federal court in California to shut down its auto business here.
Suzuki will focus on sales of motorcycles, all-terrain vehicles and boats in the U.S.
“No one should be surprised by this announcement, given Suzuki’s lackluster sales performance in recent years,” said Jessica Caldwell, Edmunds.com senior analyst.
“The company has had low margins, low-priced cars and small volume — which is far from the ideal combination. And unlike with exotic or luxury brands, it’s nearly impossible over the long term to sustain a brand on such little volume when you don’t have a healthy margin.”
Suzuki models, such as the Kizashi and Grand Vitara, did not catch on with U.S. consumers.
American Suzuki Motor Corp. said in a statement that “consumers will be protected and all warranties will continue to be fully honored.”
So far year to date, Suzuki has sold just over 21,000 new cars in the U.S., making it the third worst performing non-luxury brand behind Saab and Smart, according to Edmunds data.
Suzuki joins Daihatsu, Isuzu and Daewoo in the roll call of small Asian brands that have dropped out of the U.S. market.
Suzuki cited such challenges as unfavorable foreign exchange rates, low sales volumes and a limited number of models in its lineup as among the reasons for exiting the U.S. auto business.
