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Suzuki discontinues new auto sales in U.S.

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Nov. 8, 2012—American Suzuki Motor Corp. (ASMC), the U.S. distributor of Suzuki automobiles, motorcycles, all-terrain vehicles (ATV) and marine outboard engines, is filing chapter 11 bankruptcy and will discontinue sales of new automobiles in the continental U.S., the company announced this week.

ASMC said it reviewed its current position and future opportunities in the U.S. automotive market, and decided to realign the business in order to focus on the long-term growth of its motorcycle, ATV and marine divisions. The company said the best strategy to efficiently realign the business is to restructure operations under chapter 11.

The case will be filed in the United States Bankruptcy Court, Central District of California in Santa Ana.

After evaluating its position in the U.S. automotive industry, ASMC said its automotive division faced several serious challenges. Those challenges include low sales volume, a limited number of vehicle models, poor foreign exchange rates, high costs of maintaining a U.S. automotive distribution system, and increasing costs associated with state and federal regulatory requirements that are unique to the U.S. market.

“While the decision to discontinue new automobile sales in the U.S. was difficult to make, today’s actions were inevitable under these circumstances,” ASMC said in a press release_notes.

ASMC said it will continue to protect and honor commitments to Suzuki vehicle owners even after U.S. car sales are discontinued. The company will continue to fully honor all vehicle warranties and financial buyback agreements, and automobile parts and service will be provided without interruption through the company’s parts and service dealer network. ASMC will work with its current U.S. automotive dealer network to structure a transition from new automobile sales to exclusively parts and service operations.

ASMC said it will remain committed to the U.S. sale of motorcycles, ATV and marine products as those divisions of the company are competitively positioned in their respective markets. The business realignment is intended to position ASMC for long-term success by returning to the company’s roots in the U.S. market, which began with motorcycles.

“ASMC remains very proud of its high quality, high performance motorcycle, ATV and marine products. The company will continue to bring ASMC products to market, including its full lineup of sportbike, cruiser, touring, scooter, dualsport, motocross, off-road motorcycles and KingQuad ATV line, as well as its flagship DF300AP, state-of-the-art DF20A, and DF15A, among other models,” the company said. “Additionally, ASMC is working to further build its market share through continued investment in additional support for dealers through marketing and advertising activities and sales promotion. Suzuki will continue to have a strong presence as a sponsor of teams in supercross, outdoor motocross and road racing.”

As part of its chapter 11 filings, ASMC will submit a proposed Plan of Reorganization and Disclosure Statement that will specify how the motorcycle, ATV and marine divisions will be maintained and enhanced. The plan will also outline how its relationship with automotive dealers will be transitioned to support consumers and dealers through continued parts and service operations.

Suzuki Motor Corp. (SMC) will purchase ASMC’s motorcycle, ATV and marine businesses, as well as the automotive service operation responsible for parts and warranties, through a new U.S. subsidiary that will retain the ASMC brand name, the company said. 

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