Suzuki Evacuates US Auto Market

I found this blog post outlining Suzuki’s plans to exit the US auto market after 27 years of selling cars here. The Japanese auto maker plans to use a Chapter 11 bankruptcy filing to “effectively call it quits on American car sales,” while continuing to sell motorbikes, ATVs, and boats in the US. The blog cites poor sales and unfavorable exchange rates as the reasoning behind the exit. The Reuters article the blog references states that “Suzuki models did not catch on in the US and the company suffered from a lack of investment in new vehicles. It also struggled from the strong yen that makes it more expensive to export products from Japan.”

http://www.smartplanet.com/blog/bulletin/japans-suzuki-throws-in-towel-on-us-auto-market/4764

http://www.guardian.co.uk/business/2012/nov/06/suzuki-pulls-out-us-car-market

I think this is the exact problem that the Japanese auto makers are facing that the professor outlined in his comment on the “More Bad News for Japan’s Auto Industry” post. Suzuki sold the most cars it has ever sold in the US only six years ago at 100,000 vehicles. While this was not at all a large share of the market (0.6% of total auto sales that year), it was a 23.4% improvement and represented a peak for Suzuki. That was the year the company redesigned one of its signature models–the Grand Vitara–and introduced two brand new models –the SX4 and XL7–all to much fanfare and acclaim.

http://www.autointell.com/News-2007/May-2007/May-1/may-02-07-p13.htm

http://www.theautochannel.com/news/2007/01/04/032967.html

Despite this, Suzuki “grew complacent” as the professor says and fell behind after years of producing boring and limited model choices at the same time the traditional Japanese giants were turning out new and innovative models such as the Prius. It’s too bad, my Dad’s second car was a Suzuki.

http://www.businessweek.com/news/2012-11-05/toyota-raises-profit-forecast-after-sales-in-u-dot-s-dot-japan-gain

2 thoughts on “Suzuki Evacuates US Auto Market

  1. the prof
    If we look back, Hyundai entered and then effectively exited the US market, assembling cars in Canada 1989-1993. VW made an attempt in the 1980s, closing its plant in 1986. At one time or another Isuzu, Renault and of course Saab sold cars here (and if we go back a long ways, Fiat and others, including the Yugo). So this isn’t unique, and I expect Mitsubishi to also exit the market and close its plant in Normal, Illinois. But another niche player, Fuji Heavy Industries [brand name: Subaru], seems to be making lots of money, and they also got Toyota to take over the half of an assembly plant in Indiana that used to be owned by Isuzu, as well as to buy a minority shareholding from GM, which never found a way to integrate the Subaru “boxster” engine and AWD model lineup with their own Chevy etc makes.
    Earlier however Suzuki was allied with GM through a minority shareholding, and sold vehicles marketed as GM products. CAMI [?Canadian Auto Mfg Inc?] itself was a joint venture. When GM killed its end, Suzuki ran into problems making the factory pay for itself. As a small car specialist, it also couldn’t sell enough to keep dealerships happy. Oh, subsequently VW purchased GM’s minority stake in Suzuki, but they failed to see eye-to-eye (or pocketbook and bank) on the purpose of their alliance, and are now enmeshed in a messy divorce, big lawsuits.
    This is not a Saab story. [Don’t groan.] In India, 40% of all cars are from Maruti [= Suzuki]. It also has a strong market share for minicars and compact cars in Japan, down due to competition from Daihatsu, and also because Sukuzi emphasizes profits over sales.
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  2. tommd13

    I have watched the car business for all of my life because my father has been in it for longer than I can remember. A few years ago I remember hearing him say multiple times that anyone who owns a Suzuki dealership is in trouble. My take on it is they aren’t the fad they once were. Suzuki became complacent with their market share in the U.S. and did little to try and maintain and grow it. 100,000 to just over 20,000 cars sold in 6 years is a horrible loss of market share. This is largely due to other car makers producing competitive cheaper models that were more reliable and better built. Suzuki took their eye off a good market and became lazy ultimately causing them to have to pull out of the U.S. I hope they learn from their mistake and can continue to do well elsewhere.

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