Suzuki Buys Out 50 Dealers Across The United States

Suzuki Buys Out 50 Dealers Across The United States

With sales falling 75 percent since their record-setting year in 2007, Suzuki has taken the drastic measure of buying out 50 of its worst performing stores in the United States.

Since 2007, when Suzuki sold just over 100,000 cars, the brand has gone from 486 franchises to 300. Most dealers are selling just five cars per month, with buyout package dealers selling roughly 2 per month. Dealers were offered one of two packages, a $50,000 buyout plus a buyback of inventory, signage, special tools and other items, or a $20,000 buyout for dealers who did not participate in a Suzuki sponsored showroom upgrade program.

While Suzuki officials say that they launched the program to give unprofitable dealers an exit strategy, and to help strengthen showrooms that are successful, some observers see this as the begging of the end for the struggling Japanese automaker’s foray into the United States.

  • Chad

    This will be sad. I was looking forward to test-driving the Kizashi, and maybe owning one, but I would not want to risk buying from a company that might not be in the USA in 2 years.

  • Iron26

    There have been alot of auto manufacturors closing slow moving dealerships in the U.S. not just Suzuki.

    “some observers see this as the begging of the end for the struggling Japanese automaker’s foray into the United States”
    That is just a silly interpretation along the lines of a tabloid rumour, since Suzuki has ALOT instore for the U.S. market and with Volkswagen now standing behind Suzuki.
    If anything this is a consolidation effort on Suzuki’s end to bring greater profitability to the existing dealers that already sell in greater numbers.

    Keep in mind when it comes to current sales numbers, Suzuki is still going up against numbers which included vehicles which it no loger sells such as Forenza & Reno (both were Daewoo re-badges) and the XL7 (a GM re-badge). The Forenza all by itself represented the best seller in Suzuki’s previous line-up, so the discontinuation of those cars skewes the actual sales numbers.

    Suzuki was well aware of what discontinuing those models would do to sales numbers and yet they decided to do it anyways in order to make-way for genuine Suzuki models (not re-badges) over which Suzuki would have direct control (which it never had with the re-badges Daewoo’s or the GM XL7).
    So this was all part of the greater plan, to reshape Suzuki’s operations and presense in North America and bring forth a much stronger line-up that simply wasn’t possible with the previous offerings (the re-badges).

    But think about it this way – Suzuki survived in the North American market for several decades (previous to its current generation of cars) with almost no advertising and a much smaller dealer network than it has right now (even counting the ones that it’s closing), with the sales of just 3 vehicles – Swift, Esteem, Sidekick, with a total volume of just 25,000 units per year, and yet Suzuki is still here.

    How have they been able to survive? Because Suzuki is also known industry wide as being extremely cost-efficient when it comes to its operations. Not just in North America, but worldwide.

    I also read on a Japanese blog that another reason that Suzuki is buying-out the slowest dealers in the U.S. is because of plans to expand Suzuki’s North American dealer network through joint operations with Volkswagen (which is Suzuki’s new global partner) in which around 200 new Suzuki dealerships would be opened around the country, side by side with exisiting VW dealers that have the capacity for it.

    Indeed, Volkswagen itself has the exact same plans with Suzuki for India, in which Volkswagen is going to use Suzuki’s extensive and market dominant dealer network in that country, to expand VW’s presense over there.

    In addition to all of that, it appears that North America will be getting the all new Suzuki Swift sometime towards the end of 2011 which will give Suzuki of North America a subcompact with good MPG’s and a car that has been a worldwide sales success for the company.

    As far as SX4 and Kizashi go, Suzuki has just begun its most extensive advertising campaign in the U.S. that it has ever done. Suzuki has noted that in just the first few weeks of the new advertising campaign, traffic to its main U.S. website is up by triple digits!

    SX4 was just named one of the “2010 Top 10 Coolest New Cars Under $18,000 today” by Kelley Blue Book.

    Kizashi aslo has some new developments. Two new trim levels are arriving in the next month or two at U.S. dealerships will be the Sport SLS and the Sport GTS. Both versions will have a lower stance, enhanced suspension response, and sportier trim. It will have the same drivetrain as the regular versions however Suzuki plans to ship more of the Sport versions with 6-spd manual transmitions. Additionaly, Suzuki is already in talks with VW about a possible VR6 equipped Kizashi and/or a turbo-4 version.

    As for the Volkswagen side, that company is impressed enough with the SX4 platform and chassis design that the next Volkswagen model the Rocktan will use the Suzuki SX4 platform. It will come equipped with a VW drivetrain and possibly a diesel version (which would allow Suzuki to also use the diesel engine in its U.S. version SX4) in addition to a petrol version.

    Audi too will be briging forth its next Audi model based on the Suzuki SX4 platform. That one will be the Audi Q1.

    This is actually big news for Suzuki from both a prestige standpoint but also from an economics and production numbers standpoint.
    For actual owners of the Suzuki SX4, having both VW and Audi selling their own versions of a Suzuki also opens up the possibility of greater after-market availability, ie body kits, enhancements, etc.

    So based on all of that, it’s just a bit silly to suggest or hint that they are going to pull out of the U.S. when they have survived here off of much less than they have now, and considering all of the plans they have instore for the North American market in conjunction with their new partners Volkswagen.

    Check out some recent comparisons of of Kizashi to other well established brands –

    Go to YouTube, type in “Auto124 MidSize Sedan Comparo”.

    Also in YouTube type in “Hyundai i45 & Suzuki Kizashi Comparison Car Review”

    Another one in YouTube – “$25,000 Family Sedan Shootout”

    See for yourself. They can’t ALL be wrong. 😉

  • Robert H. Stiver

    I’ve had a 1999 Suzuki Esteem for nearly 13 years. It’s on the way to real old age, and I’m seriously considering a Kizashi as my follow-on car!