Suzuki Shrinking Monthly as Execs Favor Cost Cutting Over Investment

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Suzuki Shrinking Monthly as Execs Favor Cost Cutting Over Investment

A report out this morning documenting the downward spiral that Suzuki is caught in hints strongly that the Japanese automaker is looking to exit the North American marketplace.

For starters, sales are down. From a total of just over 100,000 in 2007, Suzuki moved just 26,618 units last year and is poised to deliver an equally unimpressive year end result with sales for the first quarter ringing in at 6,561 units. That figure is actually down 2 percent from the year before, in a market that’s up 13 percent.

As a result of low sales, as well as an initiative by Suzuki to shed franchises, the company is down 32 franchises compared to a year before. Worse than that, roughly 150 of Suzuki’s remaining 246 dealerships sell five or less cars per month.

That’s just the start of the ominous news, however. Suzuki skipped the Detroit and LA Auto Shows this year and hasn’t posted a social media message on Twitter or Facebook in months. And after the brand’s top product planning and marketing exec left the company in January, Suzuki announced he wouldn’t be replaced.

Quotes from an unnamed source speaking to Automotive News, as well as from a former Suzuki dealer, hint that the automaker has shown no signs of investment but instead is looking to reduce the hemorrhaging of cash – a not uncommon wind-down tactic. “They seem to be more interested in controlling expenses than increasing revenue,” one source said.

In fact, earlier this year Suzuki ceased paying for customer satisfaction index data from J.D Power and Associates – a key piece of information any automaker uses to help monitor its dealers. The company has said it is looking to sign anther company to supply that info, but no announcement has yet been made.

As for product, Suzuki hasn’t had a new one since the Kizashi mid-size sedan went on sale in 2009.

If there is any positive news it’s the buy outs that Suzuki offered underperforming dealers last year, paying $50,000 to 50 dealers to close up shop. Many lower performing dealers weren’t committed to the brand at all, suggests the report, instead using the franchise as a way to support large used car lots.

With many of those dealers now gone, Suzuki may be able to rebuild its U.S. operations. Then again, with no new product, shrinking sales and ominous actions by key executives, the brand’s future has never been more in doubt.

[Source: Automotive News]

  • Maybe they are waiting for someone to offer to buy them out for their intellectual property?  Suzi makes fantastic motorcycles, maybe they should focus on that.

  • IF it werent for their Cycles and Marine, they would have probably exited north america already. I guess the thing is, they arent that much different than most other asian brands, their warranty isnt especially compelling, their re-sale is poor, and with a very small group of dealers left in America ( Canada as well ) having a breakdown can be problematic if you are far away from a dealer, which is more often than not the case.

  • Don Fitzpatrick

    My wife and I bought a 2002 Suzuki Esteem GL. It now has 209,000 miles on it. Always have had problems trying to get any type of replacement parts. Going to the dealership is never any help. They never have anything in stock. And they have no idea if they can even get the parts. If they can, forget it due to the price. When to get some of the plastic buttons that hold the rear panels in place behind the rear seat. The price was about $12.00 EACH. None of the parts houses have hard parts for it either. The Esteem crapped out about a month ago. Took it to Christain Brothers Automotive in OKC. Got a call yesterday afternoon that the ECM had failed. To fix the Esteem was going to be a few dollars short of $1,100.00. I went up this morning and tailered it home. It is now parked out in the pasture with some old trucks from the 1950’s to early 1970’s, which I have no problems still getting parts for. Doing all of the maintaince myself is what I think allowed the Suzuki to run as long as it did. My plan now is to try and locate an ECM from a junk yard for about $100.00. I’ll change it out and try to bring the Suzuki back to life. We thought about tradeing it in for a Kizashi, before it died. However, after reading that Suzuki is going away, we will go back to Chevrolet products. If a junk yard ECM does not bring it back. It will be parted out on craigslist, or hauled across the scales for scrap. Still hate to do that. The Esteem was fun to drive as a daily driver and for a 500 mile trip once a month. There will be no more Suzukis in our driveway.