American Suzuki Motor Corporation (ASMC), the sole distributor in the continental United States of Suzuki Motor Corporation (SMC) automobiles, motorcycles, all-terrain vehicles and marine outboard engines, announced Nov. 5 that it will wind down and discontinue new automobile sales in the continental U.S.
Like this article? Sign up to receive our weekly news blasts here.The company said it plans to realign its business to focus on the long-term growth of its Motorcycles/ATV and Marine divisions. The company will restructure its operations under chapter 11 and will file a case in the United States Bankruptcy Court, Central District of California in Santa Ana.
ASMC said it will stand by its products and owners of Suzuki automobiles will be protected. All warranties will continue to be fully honored and automobile parts and service will be provided to consumers without interruption through ASMC’s parts and service dealer network.
ASMC remains committed to Motorcycles/ATV and Marine products, and these divisions are competitively positioned in their respective markets, allowing for long-term growth as economic conditions improve. The realignment is intended to better position ASMC for long-term success and is a return to the company’s roots in the U.S. market, which began with motorcycles and has grown to include 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, DF20A, and DF15A, among other models. Additionally, ASMC said it 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.
In evaluating its position in the highly regulated and competitive U.S. automotive industry, ASMC determined that its Automotive division was facing a number of serious challenges. These challenges include low sales volumes, a limited number of models in its line-up, unfavorable foreign exchange rates, the high costs associated with growing and maintaining an automotive distribution system in the continental U.S. and the disproportionally high and increasing costs associated with stringent state and federal regulatory requirements unique to the U.S. market. While the decision to discontinue new automobile sales in the U.S. was difficult to make, the actions were inevitable under these circumstances, the company said. ASMC will honor its commitments to automotive customers through and after the wind down of new automobile sales in the continental U.S.
ASMC 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. ASMC intends to market and sell its remaining U.S. automobile inventory through its automotive dealer network. Through and after the restructuring, all warranties will be fully honored and automobile parts and services will be provided to consumers through the dealer network, the company said. ASMC intends to honor any automobile buyback agreements that are currently in place with financial institutions.
As part of its chapter 11 filings, ASMC will submit a proposed Plan of Reorganization and Disclosure Statement that specifies how the Motorcycle, ATV and Marine divisions will be maintained and enhanced, and how its relationship with automotive dealers will be largely transitioned to support consumers and dealers through continued parts and service operations. SMC or its nominee intends to 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.
ASMC said it has sufficient cash on hand to operate its businesses during the restructuring. If necessary, ASMC will request permission from the court to borrow additional funds from SMC needed during the restructuring.
ASMC intends to operate its Motorcycles/ATV and Marine businesses as usual and is dedicated to completing the realignment process as smoothly and efficiently as possible. ASMC said it will continue to stand behind all of its products and honor all warranties from these divisions. ASMC is working with GE Capital’s Retail Finance and Commercial Distribution Finance businesses to continue providing motorcycles and ATV consumer financing programs and motorcycle, ATV and marine dealer inventory financing respectively. The company expects existing agreements with other dealer and consumer financing providers to continue as well.
Additional information regarding ASMC’s business realignment can be found at the Company’s website, www.suzuki.com, or via an information hotline at 1-877-465-4819.
