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Tuesday, November 6, 2012

American Suzuki Motor Files For Bankruptcy Protection

The American Suzuki Motor Corp. filed for Chapter 11 bankruptcy protection and says it will cease selling automobiles in the U.S. as part of a plan to restructure its business.

I suppose that's good that it is stopping the manufacture of automobiles… it has no money to pay for their construction for vehicles that no one seems to be buying in great numbers.

There's this thing called a recession going on. It's probably closer to a depression, but no one wants to say it. 

The Brea, California-based company is the sole distributor of Suzuki Motor Co. vehicles in the continental U.S.

According to documents filed with the U.S. Bankruptcy Court in the Central District of California, the company estimates its debts and liabilities range from $100- to 500-million. It also said it has between 1,000 and 5,000 creditors.

Okay… the fact that it isn't sure how many people/companies it owes money to OR exactly how much debt it has speaks volumes for the idiots in California running this company. 

Yeesh.

Okay… while the company has said that it will close many of its dealerships (the ones selling the cars and servicing them, American Suzuki Motor says it still has enough cash to operate during the restructuring and intends to honor all car warranties and buyback agreements.

This is good… because bankruptcy protection will protect the car owners… by that I mean the American Suzuki Motor company does not need to take that remaining money and pay off its creditors first. The customer is thus protected.

AST will work with its car dealerships to help them transition into parts-and-service operations.
Once it exits bankruptcy protection, American Suzuki Motor says it will focus on selling only the Suzuki motorcycles, all-terrain vehicles and marine outboard engines. No more cars. That means no more Kizashi, SX4 Sedans, SX4 Hatchbacks, Crossovers, Urbans or Grand Vitara (see photo above).

I think I may have heard of the Grand Vitara and Crossover… which I think explains the problem Suzuki has here in North America.

But the motorcycle? I'm not as knowledgeable on bikes and trikes as I am on cars, but I took a look at their website and the offerings on motorcycles - whoa! There are some mean looking machines! There's some style there! The cars? They look blah. Someone needs to hire a new design team to make the automobile division stand out. And maybe some kick ass advertising. Think Mazda's annoying Zoom-Zoom. I own a Mazda.

Suzuki says the decision to close up the car division in North America is due to slow sales, unfavorable foreign exchange rates and high costs due to U.S. regulatory requirements.

Yes… safety requirements do cost a lot. But I know that's not what it means. Trust me… if you make a car that performs better or has better gas mileage or has better safety features and at a good price - people will buy it.

Here's what I don't get about the automobile industry: Why does every car company see the need for the economy car, family sedan, SUV (multiples), sports car and luxury car? Of course they are trying to capture as much o the market as possible, but sometimes… a cobbler should stick to its own.
Excluding Chevrolet and Ford owners, people don't really stick to a brand in the face of a superior car at an affordable price. Find your niche and hammer the crap out of it.

Henry Ford had it right when he quipped about his 1909 Model T"You can have any color you want, as long as it's black." I'm too lazy to check the exact quote from his autobiography , but that's basically what he said. You start giving people too many options that they don't need you start to spread your own resources too thin. 

Oh well… Suzuki says it sold 2,023 vehicles in October 2012, which was up five per cent from the same month last year.

Its Grand Vitara sport utility vehicle posted a 64 per cent jump in sales last month, although American Suzuki did not say how many of them were sold.

In May, the last month it provided a breakdown of its sales, it moved 474 Grand Vitaras, while its biggest seller was its SX4 small crossover, of which 1,101 were sold.

But… how many vehicles did it need to sell in order top be financially viable? Obviously… despite good numbers in the Grand Vitara… a 64% jump wasn't good enough… Was that like having sold five in the month when the previous month only saw the sale of three? I exaggerate, but percentages are easy to play with when you want to hide the truth… and besides… do you really want to trust their numbers? Not only did they not know how much money they owed, but they were a lousy company at making a profit. Don't trust the numbers from the Suzuki automobile division in California!  

The bankruptcy and reorganization are unrelated to its parent Japan-based Suzuki Motor Corp., which intends to buy the American subsidiary’s remaining businesses and automotive service operation.

The reorganized company will retain the American Suzuki Motor name, the company said.

2 comments:

  1. Oddly, Honda, Toyota, Mitsubishi, Hyundai and Subaru manage to deal with the costs of making cars to meet US standards. perhaps the issue is a less than satisfactory product - just maybe.

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    1. No maybes about it. I agree with you about Suzuki in that they failed to design a vehicle that catered to American tastes - which is the first thing you need to do if you want to sell cars. You forgot Mazda and Nissan... or did you? I have owned two Mazdas, one Toyota, a Hyundai, a Nissan, two Fords (ugh... I broke down in Detroit and went to a FORD garage and had to wait a day for a FORD part!!! Lousy service!), Two Chryslers, a Plymouth and a Chevy. Oh... and a SAAB. Then again... Canadian tastes are different from American... and we don't HAVE to buy a national brand since we don't have one as a choice.

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