Suzuki’s U.S. dealers remain as repairers; firm making global auto push
More than 98 percent of Suzuki’s 219 domestic sales outlets, including all of the Top 50 performing American dealerships, have decided to remain onboard as parts and service providers as the Japanese automaker leaves the U.S. new-car marketplace. About 20 percent of the facilities also offer collision repairs.
The acceptance rate of the terms being proffered by American Suzuki Motor Corp. (ASMC) under its pending Chapter 11 bankruptcy proceedings “is a show of support for Suzuki’s efforts and commitment to supporting its dealers through the transition,” according to M. Freddie Reiss, the company’s chief restructuring officer.
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“We greatly value our relationship with our customers, and it is very important to us that they continue to receive the necessary support from ASMC during and after our restructuring,” says Reiss. “As these agreements demonstrate, we are working within our current U.S. automotive dealer network to help structure a smooth transition from new automobile sales to exclusively parts and service operations. Based on dealer acceptances, we continue to believe our restructuring and realignment will be completed in a timely manner.”
New-car sales will go forward until inventories are depleted as the company concentrates on bolstering the long-term growth of its U.S. motorcycle, ATV and marine divisions. “Many of the high-volume dealers have expressed interest in continuing to order and receive shipments of Suzuki automobiles as long as they remain available,” Reiss reports. Warranties will be fully honored; the factory-authorized parts network is expected to be in place for at least the next eight years.
Company management “is pleased with our strong monthly vehicle sales for November, and we look forward to working with our valued dealers across the country to ensure that remaining U.S. inventory is sold in the coming months,” says Reiss. “Now is a great time for customers to consider Suzuki’s attractive financing options and the full commitment to vehicle warranties, parts and continued service in place across our complete range of vehicles.”
The sell-off presents the prospect of bargains to be had, according to Joe Wiesenfelder, executive editor at Classified Ventures, producers of the cars.com website. “As a result of Chapter 11, many Suzuki dealers might be trying to clear out their inventories, which means shoppers could find a great deal,” he says.
“Potential buyers do need to understand that resale value will also be lower – unpredictably so – and parts could be harder to find,” he says. As of November, there were 3,647 new Suzukis listed for sale nationwide on Wiesenfelder’s site.
“We have seen bankruptcies immediately decrease resale value of existing cars, most recently with Saab,” says Wiesenfelder. “If past bankrupt automakers are any indication, parts will be available but may be harder to track down. Japanese Suzuki remains in business, so the prospects are more promising than they would be for a liquidated company,” he points out.
Sparked by a spurt of demand for the SX4 model and the “newly refreshed” Grand Vitara edition, news of the bankruptcy filing apparently piqued the interest of American motorists. Suzuki’s November U.S. sales of 2,224 vehicles were up 22 percent over the figures posted in November of 2011, amounting to an annual automotive boost of 42 percent for 2012.
Suzuki’s U.S. tally of motorcycle and ATV sales this past November rose 26 percent when compared to November 2011. Purchases of the firm’s marine offerings by American boaters in 2012 marked an annual increase of 50 percent over 2011’s sales.
Last summer, the company launched a new four-stroke large outboard motor, the DF250AP, which features “Suzuki Lean Burn Control” and is suitable for sport fishing boats, high-speed cruisers and commercial vessels.
Established in 1909 as the Suzuki Looms Works in Hamamatsu, Japan by Michio Suzuki, it set up its Brea, Calif.-based American presence in 1963. The company currently has operations in 201 nations.
With the exception of the U.S. marketplace, Suzuki’s global automotive sales efforts show no signs of abating as the firm embarks upon an accelerated push into India and throughout Southeast Asia.
“Under the slogan, ‘Small cars for a big future,’ we will work forward to make small and environmentally friendly cars that are wanted by the customers, as well as to implement highly efficient, sound and lean management by making things ‘smaller, fewer, lighter, shorter and neater’ in production, organization, facilities, parts, environment and other various fields,” says Chairman and CEO Osamu Suzuki.
“Because value differs according to the times, country and lifestyle, we are fully determined to challenge for the creativity to make such products for customers around the world,” he notes.
Compared to the previous Alto model, the 800 edition “has been also improved in its torque for smooth driving in the city, and its transmission and suspensions were modified to suit the Indian market,” Osamu Suzuki says. “The main targets of the ALTO 800 are customers considering the purchase of first cars, such as young customers,” he adds. Manufactured in India, the company plans to export the vehicle to neighboring nations.
Last year also saw the release of the Thailand-built Suzuki Swift eco-car, which is being promoted by the Thai government based on the vehicle’s environmental friendliness.
“We would like to be hand-in-hand with the people in Thailand to assist our customers’ wealthy lives with their vehicles by delivering valuable products to the customers in Thailand and to the customers worldwide from Thailand,” says Toshihiro Suzuki, the automaker’s executive vice president. “The new Swift is also being produced in Japan, Hungary and India, achieving high appraisal worldwide for its driving performance and design.”
Set to begin production later this year, Vietnam Suzuki Corp. is constructing a new auto plant next to its existing motorcycle factory in Dong Nai Province just north of Ho Chi Minh City. The company expects to eventually increase the new plant’s initial capacity of 5,000 cars per year.
“To meet the expanding Chinese automobile market and promptly establish an annual capacity of 500,000 units, Suzuki has decided to construct its second plant in the area next to its current plant,” reports Toshihiro Suzuki, describing a new factory being built by China’s Changan Suzuki joint venture. “Ever since the beginning of production of the Alto in May 1995, Changan Suzuki has been producing and distributing unique vehicles that are appreciated by the Chinese customers – such as Cultus, Swift and SX4 – for 19 years.”
Scheduled to begin rolling cars off the line in December 2013, the new plant’s initial annual production capacity of 150,000 units is expected to significantly rise “as the market expands,” according to Toshihiro Suzuki.
He is equally enthusiastic over the April 2012 launch of the three-row passenger Suzuki Ertiga MPV (multi-purpose vehicle) in Indonesia. About 60 percent of the nation’s motorized passenger conveyances are of the MPV variety. “Ever since Suzuki started its production in Indonesia from 1976, throughout these 36 years, we have always been providing products that satisfy customers in Indonesia,” Toshihiro Suzuki says. “We strongly feel that the Ertiga will also be a product that satisfies people in Indonesia.”
For more information, visit www.globalsuzuki.com.
About the Author
James Guyette
James E. Guyette is a long-time contributing editor to Aftermarket Business World, ABRN and Motor Age magazines.