American Suzuki files for Chapter 11 bankruptcy, plans to exit U.S. new-car market

Nov 7, 2012

American Suzuki Motor Corp. plans to discontinue new automobile sales in the United States after nearly 30 years and filed for Chapter 11 bankruptcy protection.

The Brea, Calif.-based company said in a statement that it will realign its business to focus on the long-term growth of its motorcycle and marine engine units. The company noted it will continue to honor customers’ warranties, and auto parts and services will be provided to customers through American Suzuki’s parts and service dealer network.

Japanese parent Suzuki Motor Corp. is not seeking protection from creditors, the company stated.

In evaluating its position in the competitive U.S. auto industry, American Suzuki listed challenges such as “low sales volumes, a limited number of models in its lineup, unfavorable foreign exchange rates, the high cost 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 unique to the U.S. market.”

The company said it plans to sell its remaining inventory through its dealers and intends to work with current U.S. Suzuki dealers to structure a smooth transition from new automotive sales to exclusively parts and service operations, or “in some instances, an orderly wind down of dealership operations.”

American Suzuki joins Daihatsu, Isuzu and Daewoo as smaller Asian brands to drop out of the U.S. market while bigger rivals climb back from the recession.

Although American Suzuki reported a 5% sales increase in October compared to the previous year, it only sold 26,618 vehicles last year. While Suzuki sales slipped, the U.S. auto industry as a whole has grown 10% or more since 2009, including this year’s 14%.