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TSX69 11-06-2012 08:52 AM

Suzuki Ends US Sales
 

American Suzuki Motor Corp., whose U.S. demand plunged while the industry climbed back from recession, said it will end U.S. auto sales and filed for Chapter 11 bankruptcy protection.

The company, in a statement Monday , said it will continue its motorcycle and marine engine business units and will continue to honor auto customers' warranties. Japanese parent Suzuki Motor Corp. is not seeking protection from creditors, the company said.

In its filing, American Suzuki said it "has exhausted all available means to reduce the cost of operating the Automotive Division for it to operate profitably."

Among the listed challenges were "unfavorable foreign exchange rates, disproportionally high and increasing costs associated with meeting more stringent state and federal automotive regulatory requirements unique to the continental U.S. market, low sales volumes, a limited number of models in its line-up, and existing and potential litigation costs.''

The automaker joins Daihatsu, Isuzu and Daewoo as smaller Asian brands to drop out of the U.S. market while bigger rivals grew.

As recently as 2003, Suzuki touted a plan to lift U.S. sales above the 200,000 mark. It barely reached half that goal, topping 100,000 in 2006 and 2007.

As industry demand sagged to 27-year lows in 2009, Suzuki volume fell to 38,695. Last year, 26,618 Suzukis were sold, and this year's volume through October is off 5 percent from a year earlier.

While Suzuki has slipped, the industry has grown by 10 percent or more each year since 2009, including this year's 14 percent advance through 10 months.

In its filing in the U.S. Bankruptcy Court for the Central District of California in Santa Ana, Suzuki listed assets of $100 million to $500 million and liabilities in the same range.

Dealer tally

The filing lists 220 U.S. dealers, down from 246 at the start of the year.

The company "intends to work within its current U.S. automotive dealer network to help structure a smooth transition from new automobile sales to exclusively parts and service operations, or, in some instances, an orderly wind-down of dealership operations," Suzuki said in a statement.

Suzuki says it plans to sell its remaining inventory through its dealers.

Scott Pitman, whose Suzuki of Wichita (Kan.) store is Suzuki's largest U.S. dealership, said he was "in a state of shock" after learning Monday evening of the brand's planned exit.

"I don't have my mind around the whole thing. I've only talked to dealers I haven't talked to the executive team yet, so I don't know all the details," Pitman said. "We love the brand, and we've been big faithful supporters, and we're sad right now."

Pitman, a Suzuki dealer since 2007, said the 940 new Suzukis he sold through October surpassed his new vehicle sales for all of 2011.

Behind the decline

Among the reasons for Suzuki's collapse after 2007:
The credit crunch of 2008 blew up the subprime market, the heart of Suzuki's business.

Poor vehicle quality squelched return business.

Dubious practices by some stores, such as "no payments for life" promotions, akin to real estate balloon mortgages, led to lawsuits and bad publicity. A suit by a former high-volume dealer alleged that Suzuki pressured him to file phony sales reports to keep a bonus merry-go-round turning.

In a rush to add dealers, Suzuki added some used-car sellers who wanted the cachet of a new-car franchise to boost used-car sales but didn't work to build the Suzuki brand.
Coping

Suzuki slashed costs to cope with the sales decline. The brand skipped major U.S. auto shows, including the most recent Los Angeles and Detroit venues. Executives responsible for marketing, public relations, product planning and other functions have either left or were let go this year, without being replaced.

Suzuki hasn't run national television ads since 2009. What little the company has spent has gone toward regional TV spots. Suzuki even briefly ceased promotional efforts on low-cost social media channels, including Twitter and Facebook, earlier this year.

As its lineup aged -- the brand's newest vehicle is the Kizashi sedan, launched in late 2009 -- the company has steadfastly refused to discuss possible future products publicly or with its dealers.

Along the way, CEO Osamu Suzuki has been tepid about his company's commitment to the U.S. market, saying he wants to focus more on emerging markets instead.

At an earnings press conference in August, Executive Vice President Toshihiro Suzuki, eldest son of CEO Suzuki, deflected direct questions about a possible withdrawal from the U.S. market.

"We will solemnly work with the current lineup, or by adding minor changes to the current lineup. We will not overstretch ourselves. We won't go so far as to generate a deficit in order to sell" cars, he said, when asked if the company was considering a retreat.

"Our basic stance is to solemnly proceed with a sales system that is appropriate for the sales volume."

whatsanacura 11-06-2012 09:01 AM

I think we all saw this coming

TSX69 11-06-2012 10:42 AM

Sport
 
That is a shame. Someone in my parking lot has a Kizashi Sport & it is a very nice looking car:

Bjwsan 11-06-2012 12:20 PM

While I like my 'Made in Japan" TSX... without 'in country' manufacturing a company cannot compete in US market... especially with the devaluation of the US$... sayonara:(

kvndoom 11-06-2012 03:01 PM

Quote:

Originally Posted by Bjwsan (Post 896258)
While I like my 'Made in Japan" TSX... without 'in country' manufacturing a company cannot compete in US market... especially with the devaluation of the US$... sayonara:(

The TSX isn't long for this world either though. The ILX has stolen half of its sales each month, which is what Honda wants, so they can justify dropping it. ILX production costs are more yen-proof.

Bjwsan 11-06-2012 03:47 PM

Quote:

Originally Posted by kvndoom (Post 896284)
The TSX isn't long for this world either though. The ILX has stolen half of its sales each month, which is what Honda wants, so they can justify dropping it. ILX production costs are more yen-proof.

Ouch - case in point! Nothing against Indiana, but I bought the TSX because it was 'Made in Japan'. Had an Accord LX when I lived in Japan in early 90's, came back to states and bought an EX made in Marysville, OH... and it was soft, slow and worlds apart. Didn't look at a single TL... for that same reason...

Hey, there's always used!

Heinz Waescher 11-07-2012 06:47 AM

What a shame, i saw this car last week at the local OPel-KIA-SUZUKI dealer for the first time and i have to admit that i am still impressed by the design and the available CVT and 4WD.

http://upload.wikimedia.org/wikipedi...rey_Hinten.JPG

TSX69 11-07-2012 08:41 AM

Mitsubishi
 

Suzuki Motor Corp.'s withdrawal from the U.S. auto market leaves struggling Mitsubishi Motor Corp. as the Japanese automaker with the fewest U.S. sales.

But Mitsubishi President Osamu Masuko today reiterated his commitment to the U.S. market, denying any plan to follow Suzuki's retreat.

"We have no intention whatsoever of withdrawing from the U.S. market," Masuko told Automotive News in an interview today. "The U.S. market is a very important market."

Through October, Mitsubishi's U.S. sales plunged 29 percent to 50,103 units, and its market share shriveled to 0.4 percent from 0.7 percent in the same period of 2011. Its dealers lead the industry in terms of backlogged inventory.

And in a U.S. market that advanced 14 percent in the first 10 months of the year, Mitsubishi posted the biggest percentage sales decline among automakers.

The automaker's U.S. sales peaked at 345,111 units in 2002.

Suzuki, which saw sales fall 5 percent to 21,188 units through October, is the only Japanese automaker with fewer sales than Mitsubishi. Suzuki said Monday that it is giving up on the U.S. auto market after nearly three decades.

The decline in Mitsubishi's sales has fueled sporadic speculation in recent years that it might withdraw from the U.S. market and refocus on fast-growing emerging markets, where it enjoys brisk sales.

But Masuko said the drop in U.S. sales this year is largely due to the discontinuation of four main models: the Eclipse, Eclipse Spyder, Galant sedan and Endeavor crossover.

And Masuko expects U.S. sales to rebound next year. U.S. sales should reach 55,000 units in the current fiscal year ending March 31, 2013. But they should climb to around 80,000 units in the following fiscal year, Masuko said.

They will be helped by the launch of new vehicles, such as the Outlander crossover, which arrives stateside next July, he said.

Mitsubishi also plans to ramp up production at its only North American assembly plant in Normal, Ill. The plant makes the Outlander Sport small crossover at a pace of around 50,000 units a year.

Masuko said Mitsubishi intends to boost output at the Illinois plant to 70,000 units next year, with production underpinned to support increased exports to such markets as Russia, Latin America and the Middle East.

In another move aimed at bolstering its U.S. prospects, Mitsubishi last week named Gayu Uesugi, executive vice president and board member of Mitsubishi Motors, as chairman of Mitsubishi Motors North America.

Uesugi, 60, is charged with crafting a profitable product plan, growth strategy and manufacturing blueprint for the U.S. market, Masuko said at the time of the appointment.

Uesugi most recently led product strategy and development, cost control and procurement as the head officer of Mitsubishi's product projects and strategy group.

The company says he has played a major role in developing Mitsubishi's current product strategy, which has produced profitable growth in emerging markets such as Russia, China and Thailand.

kvndoom 11-07-2012 09:58 AM

Quote:

Originally Posted by Heinz Waescher (Post 896406)
What a shame, i saw this car last week at the local OPel-KIA-SUZUKI dealer for the first time and i have to admit that i am still impressed by the design and the available CVT and 4WD.

I'm strongly considering a 2011/12 6MT Kizashi SLS for a future purchase in a few years. I'm certain they will depreciate massively just like Saturn did, and be a hell of a bargain. This review says they are really solid and refined cars, perfect replacement for my TSX when I pass it down.

Review: 2011 Suzuki Kizashi Sport | The Truth About Cars

Bjwsan 11-07-2012 12:24 PM

Quote:

Originally Posted by Heinz Waescher (Post 896406)
What a shame, i saw this car last week at the local OPel-KIA-SUZUKI dealer for the first time and i have to admit that i am still impressed by the design and the available CVT and 4WD.

CVT... ugh! Wife had an Altima, and I couldn't stand it. Test drove the Maxima w/ CVT, and didn't like that either.
Hey, my TSX is 5AT... not the 6MT, so clearly I'm lazy and old... but can't do the CVT.

whatsanacura 11-07-2012 07:30 PM

The Kizashi was my favorite, such a rare car I've seen maybe a couple in two years

Lester_B 11-10-2012 05:23 AM

Suzuki has joined Isuzu in making a slow exit from the U.S market. The company didn't survive, now some specialists have speculated that Mitsubishi might be the next Japanese automaker to follow in its footsteps. However, Mitsubishi claims nothing could possibly be further from the truth. If the automaker can get those sales number up, it just may be able to keep that plant operating. I read this here: Mitsubishi vows to not follow in Suzuki footsteps.

Heinz Waescher 11-15-2012 09:49 AM

Quote:

BREA, Calif., July 27, 2011 /PRNewswire/ -- Since its North American debut, the Suzuki Kizashi midsize sports sedan has earned significant praise from automotive media and consumers alike. With the release of J.D. Power and Associates' 2011 Automotive Performance Execution and Layout (APEAL) Study, that praise has been validated once again with the 2011 Suzuki Kizashi registering the highest total overall score among all new purchased or leased midsize cars sold in the United States. The Kizashi outperformed 19 other midsize competitors to earn the top award in the category, including earning the top spot in more than half of the individual category ratings. The median buyer profile also averaged 10 years younger and with higher income than the midsize segment average. This recognition follows other consumer satisfaction awards including the announcement earlier this summer that the Kizashi topped AutoPacific's annual Vehicle Satisfaction Awards (VSA) for the second consecutive year.
PR Newswire (2011 Suzuki Kizashi Earns Highest Satisfaction Rating in J.D. Power Study -- BREA, Calif., July 27, 2011 /PRNewswire/ --)

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:dunno::dunno::dunno:


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