Suzuki's U.S. Departure: No Surprise to its Dealers

Washington November 9, 2012; The AIADA newsletter reported that when Suzuki Motor Corp. disclosed this week it would pull out of the U.S. auto market, the news came as little surprise to dealers who had struggled with a dramatic plunge in sales over the last five years.

A maker of inexpensive compact cars and small sport-utility vehicles, Suzuki first was hurt by its heavy reliance on consumers with poor credit who were among the first to leave the market when credit dried up in late 2008 and later by the strong yen, which made its vehicles more expensive. According to The Wall Street Journal, the Japanese company also faced tougher competition in the low-priced car market from Korean rivals Hyundai Motor Co. and Kia Motors Corp.

On Monday, dealers including Don Hicks, who owns a Suzuki dealership in Aurora, Colo., got the news that Suzuki’s U.S. subsidiary, American Suzuki Motor Corp., filed for Chapter 11 bankruptcy protection. “I wasn’t particularly surprised,” Mr. Hicks said. “They had been really slowing things down for a while.” Suzuki’s 220 U.S. dealers now face the task of winding down their stores, which includes selling off remaining vehicle stock.