American Suzuki Motor Corporation is seeking Chapter 11 bankruptcy protection for its U.S. auto business with the intention of ceasing the sale of vehicles in the U.S. In October of 2012, Suzuki sold just 2,039 of small cars and light trucks or 0.018 % of the U.S. retail auto market. Year-to-date fewer than 22,000 vehicles were sold.
Suzuki entered the U.S. market with its ill-fated Samurai mini-SUV in the mid-1980s and was never to able to sell its vehicles in large numbers here because of their size and dubious safety image. Elsewhere in the world, notably Japan, India and Asia, Suzuki remains a force in the mini-vehicle market, as well with motorcycles. However, margins in the U.S. were not high enough on small vehicles to effectively promote the brand against global giants with larger and more profitable lineups.
Suzuki intends to redirect all of its operating resources to motorcycles, ATVs and marine products. Suzuki had debt of $346 million at the end of September, of which as of September 2012, $173 million are owed to Suzuki group companies held by Suzuki Motor Corporation. Capitalization was $64 million.
Suzuki says the current U.S. automobile sales network will be converted into authorized service and parts dealers, which it claims will allow the Suzuki to honor all warranties and make service and parts available to customers nationwide.
In the Japanese fiscal year ended 31 March 2012, American Suzuki lost almost $16 million or -$0.02 per share, all of which – 5651 million shares – the parent company SMC owns.
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