American Suzuki Announces Restructuring
Tuesday, November 6, 2012 | 4:55 PM
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AMERICAN SUZUKI MOTOR CORPORATION (“ASMC”) ANNOUNCES RESTRUCTURING AND REALIGNMENT TO FOCUS ON MOTORCYCLES/ATV AND MARINE DIVISIONS
ASMC to wind down and discontinue new automobile sales in continental U.S. Consumers will be protected and all warranties will continue to be fully honored
ASMC to wind down and discontinue new automobile sales in continental U.S. Consumers will be protected and all warranties will continue to be fully honored
BREA, Calif. – American Suzuki Motor Corporation (“ASMC” or “the Company”), the sole distributor in the continental United States of Suzuki Motor Corporation (“SMC”) automobiles, motorcycles, all-terrain vehicles and marine outboard engines, announced that it plans to realign its business to focus on the long-term growth of its Motorcycles/ATV and Marine divisions. Following a thorough review of its current position and future opportunities in the U.S. automotive market, ASMC will wind down and discontinue new automobile sales in the continental U.S. The Company has determined the best path to achieve this realignment in an efficient and orderly manner is to restructure its operations under chapter 11. The case will be filed in the United States Bankruptcy Court, Central District of California in Santa Ana.
Consistent with ASMC’s long history of standing by its products, 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 firmly 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. 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. 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.
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, today’s actions were inevitable under these circumstances. ASMC is dedicated to honoring its commitments to Automotive customers through and after the wind down of new automobile sales in the continental U.S.
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Suzuki's failure in the American automotive industry is a story as old as business itself; great product, lousy sales department. Many of Suzuki's newer cars were actually pretty decent vehicles with good gas mileage and warranties. I know several people who own Suzuki cars and have nothing but good things to say about them. The problem was they hardly ever had commercials or any other form of advertising. Hopefully this will let them pour some money into the development of their motocross bikes.
"Hopefully this will let them pour some money into the development of their motocross bikes".........Hallejua! MX40!
Investing back in the ATV (and UTV which, they don't even have) and Motorcycle markets that were their bread & butter from day one.......Sound financial advice?
The people that are gone, are gone. They ain't coming back.
Does this mean the "Factory Team" is coming back?
Will they increase or decrease support to the satellite teams?....or even keep 'em?
Where does Yoshimurs stand in all of this?
What affects will this have on #7's attitude, contract & career?
I think the financing had a hand in their demise as well. Financing is the liasion between the customer and their product and if they aren't getting covered on the financing, no sale.
Im sure ol'7 will likly take a huge pay cut..... if not be let go. Im pretty sure this will impact his contract some how.
As a life long Suzuki rider, I am glad to see them refocus on the industry that made them successful in America. They have had their financial ups and downs over the years, being the smallest of the 4 Japanese manufactures, they have always been the underdog. They make a quality product, but as MX40 pointed out, marketing was not Suzuki's strong suit and in today's market place it is just as important as the product itself.
To guess the answers to some of Carlsbad's questions:
I don't think we will see the return of the factory team any time soon. Suzuki has had so much success farming out their road racing program, I would expect the motocross side to stay with Yoshimura also. It seems to work for both parties and I think Yoshimura new in advance that this was coming.
This should not effect James contract, as it was already done with the Yoshimura Suzuki race team..
The satellite team, RCH/H knew this was coming and was made possible by Suzuki dropping the automotive line in the US. Two or three years ago HH tried to go Suzuki but Dodge said no, as Suzuki was an competitor in the auto industry. Some one knew something or this deal could not have been made..
It's super obviously Obama's fault. It would have never happened under Bush or Romney, they believe in Christ.
Jesus -
I totally agree! and pretty soon, people will be forced to marry their dogs (or at least that's how I think that argument goes).
Smaller and leaner sometimes means better. Lets hope this is the case for Suzuki. Their cars were terrible and their distribution network was even worse, so in a way, good riddance.
Chapter 11 Bankrupt! They will comeout the otherside leaner and have a shot at making money....Which is what it IS all about! To Bad the rest of America dosn't under stand that!
@Jesus - Maybe James Stewart's salary put Suzuki in bankruptcy?
@ BD25 Congrats on your Romney victory for the great Show me state !
BRING BACK LTR 450 PLEASEEEEEEEEEEEEEE
DuluthMN..not sure what the show me state of Missouri has done, but my state Oklahoma, land of the red man, went red in a big way!!! Give Mr Mx a howdy from me
i think this is some GREAT news. maybe the doom merchants are proven right, but they're refocusing their effort on the place they started - recreation and racing. i don't envision Stewart getting a pay cut, i think Suzuki is seeing him as their own Lance Armstrong (pre-doping story of course) -- a marketable star, which he is, to give them higher visibility for their off-road segment (especially to people who don't already ride). assuming chaper 11 is what they'll have to go through in their transition, but when they say they have plans to "realign its business to focus on the long-term growth of its Motorcycles/ATV and Marine divisions", that's gold.
Them leaving the automotive market does make for some interesting sponsorship / team possibilities...............JGR Suzuki's anyone?
BD25 Sorry wrong state will do
DuluthMN... No Problem and Thanks!!
This is nothing but good news. Now if they could just make a killer 1000cc adventure tourer bike with inverted forks, real rear suspension, high pipe, 500 mile tank capacity, then we are talking.
Long as they stay afloat and regroup , tighten up the ship , build me a damn RMZX 400/450 E and continue making great bikes I wish them nothing but success. KLRman and I have already given you a couple new models WE WILL BUY.....get to work.
mmmm SHOULDN"T HAVE GIVEN JS7 ALL THAT MONEY. The guy wona few sat ant home just like at JGR. I dont think the story will change 2013. JS7 should quit may be its time to be atrainer or own a team or something. If he races he ends up on the dirt 99% of the time. Its time to move on. Not hating on the kid just reality.
Dgizzy1 I totally agree... Stew should just hang up his helmet and run his own team. Im pretty sure it has crossed his mind.
For clarification this is American Suzuki that has filed Chapter 11. American Suzuki is merely the North American Distributor for Suzuki products. I'm certain that JS7's contract is with Suzuki...not American Suzuki.
Development $$ come from the corporate level...not the distribution level.
I do agree with you on the fact that Suzuki makes great products yet they are suffering bringing the products to the consumers in our market. That is a direct failure of their distribution in North America. They have always struggled maintaining a strong dealer precence with both powersports and automotive in the US.
Let's hope this frees up the capital to shore up the postitions of their powersports products in the US.
A re-structured bankruptcy, funny I thought large companies could only survive with massive taxpayer funded bailouts? How do they survive through a bankruptcy? That's right every Airline has gone through it and are still around...weird.
No matter what this is bad news. The motorcycle market is seriously in the dumps, both street and off road. How profitable can they be going forward?
I'll be back on a Suzuki when they offer an updated Rm250 two stroke. IF they want to continue building things that people don't want - they can continue scratching their heads when it doesn't sell. People want two strokes. They can hold out for 10 more years and you'll just see more orange. Or they can read the writing on the wall and build the stuff they used to build that people used to buy.
With the emergence of KTM and now the Chinese, Suzuki's (as well as Hon, Kaw & Yam) piece of the pie has gotten smaller.
Maybe following KTM's lead and producing small runs of specific-market machines could be the path to success in the new market / economy.........though I doubt we'll see a new two stroke out of J-pan........I would bet on 350's before that.
As far as a touring bike goes, I don't know what the hold up is, but holding back on the RMX (Z) and LTR models seems to be EPA related. I don't think Suzuki wanted to or could afford putting up the scratch to pass the CARB/EPA mandates for making the bikes compliant........or liability issues they (corporate) couldn't overcome.
They are going to have to rethink the off-road segment, 'cause they're losing out on the LTR450, RMX & UTV (that they need to introduce) sales.
I also still think they're stupid for S-canning their can't lose-lead-pipe-lock-stamp it ATV MX team.
@tonewall..... yes, I've been waiting for many years for a decent vstom-1000. I have a 2007 and the upgrade they did with next years model does not look or feel right. It's as if they tried to copy from other bikes and smack the parts together, but I know Suzuki has it in them if they really wanted to and got the passion back.