Posted in: Cars,
by Gregg Laskoski on Nov 8, 2012 06:30 AM
Automotive News reported this week that American Suzuki Motor Corp., plagued by plummeting sales volume while the industry has climbed back from recession, is ending U.S. auto sales after nearly 30 years. It has filed for Chapter 11 bankruptcy protection.
The company said it will maintain its motorcycle and marine engine business units and will continue to honor auto customers' warranties. Japanese parent Suzuki Motor Corp. is not seeking protection from creditors, the company said.
In its filing, American Suzuki said it "has exhausted all available means to reduce the cost of operating the Automotive Division for it to operate profitably."
The automaker joins Daihatsu, Isuzu and Daewoo as smaller Asian brands to drop out of the U.S. market while bigger rivals grew. Suzuki launched sales in the U.S. market in 1985 with the Samurai compact SUV.
As recently as 2003, the company touted a plan to lift U.S. sales above the 200,000 mark. It barely reached half that goal, topping 100,000 in 2006 and 2007.
However, as industry demand sagged to 27-year lows in 2009, Suzuki volume fell to 38,695.
Additionally, in discussing the challenges that have proved to be overwhelming, Suzuki executives said the obstacles were many: "unfavorable foreign exchange rates, disproportionally high and increasing costs associated with meeting more stringent state and federal automotive regulatory requirements unique to the continental U.S. market, low sales volumes, a limited number of models in its line-up, and existing and potential litigation costs.'