Marine and motorcycle divisions will continue
San Francisco, CA -- (SBWIRE) -- 11/16/2012 -- Plagued by low sales, fierce competition, and poor foreign exchange rates, American Suzuki Motor Corp. plans to cease its United States auto operations and file for Chapter 11 bankruptcy protection.
In a released statement, the company said it would continue its marine engine and motorcycle divisions. It stated it will also continue to honor warranties and provide parts and service through its parts and service dealer network.
The statement indicated Japanese parent company Suzuki Motor Corp. will not file for bankruptcy.
The company pointed to high costs, tight regulations, foreign exchange rates, and low U.S. auto sales as primary reasons for the decision.
Although U.S. auto sales were up 14% total through October, they were down 5% during the same period of time for Suzuki.
“While the decision to discontinue new automobile sales in the U.S. was difficult to make, today’s actions were inevitable under these circumstances,” read the company statement.
The corporation plans to stay in close touch with its 246 U.S. auto dealers in coming days. Its statement indicated it “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.”
Suzuki began selling automobiles in the U.S. in 1985. Its most well-known models are the Samurai compact SUV and the Swift compact car.
Analysts said Suzuki’s move was to be expected.
“I don’t think it’s a big surprise given their lackluster sales performance of recent years,” said Jessica Caldwell, an analyst with auto information company Edmunds.com. “They have have low margin, low-priced cars with small volume. That’s far from the ideal combination. Over the long term it’s hard to sustain a brand on such little volume when you don’t have a healthy margin like exotic or specialty brands.”
CheapAutoInsuranceCenter.net (http://www.cheapautoinsurancecenter.net/) lets online auto insurance shoppers compare quotes from national and top-rated insurance firms that allows them to check latest commercial auto insurance figures. The easy-to-use website also provides information and tips on how best to make an informed decision on the type of coverage to buy and get commercial auto insurance quotes. Besides quick results, it also provides high-quality round-the-clock service for high risk car insurance and cheap car insurance for high risk.
Copyright © 2005-2013 - SBWire, The Small Business Newswire - All Rights Reserved - Important Disclaimer
Contact Us: 888-4-SBWIRE (US) - 920-321-1250 (International)