Sayonara, Suzuki

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Cue Taps. There goes Suzuki.

On Nov. 6, the company (American Suzuki) announced it would stop selling cars in the U.S. after current inventory peters out – and that it will be filing for bankruptcy reorganization under Chapter 11.  The company is $346 million in debt – with just $223 million in assets. Total market share has plummeted to .2 percent. Yep, the decimal is in the correct position. That’s point 2 percent market share – and sliding fast. Unsustainable. Pointless. Titanic – an hour after hitting the iceberg. Done.

So, after 2012 it’s all over. Another brand bites the dust.

What happened – and what does it mean?

Weirdly, Suzuki has had no trouble selling motorcycles – in fact, it is one of the most successful sellers of motorcycles on the market. And Suzuki’s cars were good cars.  The Kizashi, for instance. It was – still is, for another few weeks  – one of the most affordable AWD sporty sedans on the market.

They just didn’t sell

As to why they didn’t sell – well, a couple of factors played a part. The biggest handicap was arguably the relative scarcity of Suzuki dealerships. No matter how good a vehicle may be, it’s a harder sell if the would-be buyer faces an hour’s drive (or three hours’ drive) to have the vehicle serviced.  I have always wanted a Ducati motorcycle. But the nearest-to-me Ducati store is in Richmond – a three hour drive, one way. Forget it. The Kawasaki place is 20 minutes away. Thus, I own Kawasakis – even though I’d very much like to own a Duc.

But, wait. While Suzuki car dealerships are sometimes hard to find,  most places – even small towns, like mine (Roanoke, Va.) do have a Suzuki  motorcycle dealership.  One wonders whether it ever occurred to American Suzuki management to leverage its bike stores to help move cars. Offer incentives to its bike dealers to at least “storefront” Suzuki cars. Corporate could have helped with loans and so on to expand existing bike stores to handle cars. The important thing being, the Suzuki brand would already be an established operator there.

Not only would this have helped Suzuki materially by making it more convenient for people to buy a Suzuki car, it would have helped psychologically, too. Suzuki cars (and car buyers) could have basked in the reflected glory of Suzuki motorcycles. Just as Chevy sexes up Malibus by associating them, family-wise, with Corvettes. The “halo” effect. It is tragic that American Suzuki didn’t see this opportunity. With the exception of Honda, no other current automaker has a hugely successful line of motorcycles to glom some glory from. Suzuki does.

Well, did.

I hate to see them go – because it means one less competitor – which means we (car buyers) are the poorer. It means more consolidation, more same-sameness as smaller automakers fold up their tents or are swallowed up by mega cartels. I mourned the end of Saab last year, too. Like the soon-to-be-dearly-departed Zooks, Saabs were noticeably different cars – for once. Gone, now.

More will follow during 2013, too.

It is probably time to start measuring Mitsubishi – the smallest Japanese automaker in the U.S., now that Suzuki sleeps with the fishes – for a casket.  Virtually nothing new on deck for 2013 – the majority of its inventory comprised of getting long-in-the-tooth models that are increasingly uncompetitive in their segments. Sales are way down. No, more than just “way down.” Free-falling. Catastrophic. Down almost 30 percent this year – leaving the triple diamond with a 0.4 percent market share. Heavenly slumber beckons… .

In Mitsu’s case, it’s not a dearth of dealerships that has led to this debacle. The company made some epically bad decisions recently – most notably the “0-0-0″ marketing plan that pretty much gave cars away. And worse than that, gave them away to people who couldn’t even afford 0 down 0 payments and 0 interest for one year. Or rather, who dropped the cars the day after the “0-0-0″ deal’s terms expired. Leaving Mitsu holding the bag. Holding the title to thousands of thrashed – and massively depreciated – year-old cars. The company has yet to recover from this – and may never recover from it.

I’m also not optimistic about Lotus – a storied brand that deserves to make it but which isn’t making it, in part because  its cars are as expensive as Porsches but have the hearts of Toyotas. Souped-up Toyotas, admittedly. But Toyotas nonetheless. Being a tiny brand without the resources to R&D its own engines, Lotus bought them from someone else (Toyota) and hoped people wouldn’t notice – or care if they did. Apparently, too many did. The Elise got dropped after 2011. In fact, so did other Lotus models.Technically, there hasn’t been a new Lotus  since model year 2011. It is six weeks from 2013.

You tell me.

Some think Chrysler is going to ride the white canoe, too. That it’s not for nothing that Fiat – Chrysler’s owner – spun off the profitable truck arm (now Ram Trucks, not Dodge trucks). That this move is  preparatory to the anticipated end for Chrysler cars. There may be something to this. There’s not a lot of new stuff in Chrysler’s product portfolio, car-wise. Some sniff the smell of death in the air.

I guess we’ll see. And very soon, too.

PS: If you have a Suzuki car, don’t worry. Dealer support will continue – and service parts ought to be available for some time to come. Unlike Saab – which has ceased to exist as an automaker – Suzuki will continue to exist. And will continue to sell cars, too. Just not here.  But the important thing to keep in mind is that service parts – and service – should not be a problem.

Throw it in the Woods?

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eric

Author of "Automotive Atrocities" and "Road Hogs" (MBI). Currently living amongst the Edentulites in rural SW Virginia. 

  23 comments for “Sayonara, Suzuki

  1. Brandonjin
    November 16, 2012 at 3:36 am

    Very sad about Suzuki going. They were pretty rare so I liked them. I thought about getting a Kizashi 6-speed when I was out of school, and was really looking forward to a second generation Kizashi. Oh well. Mazdas my brand now :P

    • November 16, 2012 at 10:46 am

      Me too.

      But you might still look at the Kizashi.I bet you could get a great deal on one. And don’t worry about service. Dealers will still exist – and any competent mechanic will be able to service the car. Suzuki will still sell cars in other markets as well, so I doubt necessary maintenance parts will evaporate any time soon…

  2. James
    November 16, 2012 at 4:15 am

    “One wonders whether it ever occurred to American Suzuki management to leverage its bike stores to help move cars.”

    Mm. Were I the owner of a Suzuki motorcycle dealership, I’d likely take exception to Corporate requiring me to take on a bunch of hoary little “cages” (the allegedly functional Kizashi notwithstanding). No, I think I’d be happier with just the bikes on my floor.

    • November 16, 2012 at 10:40 am

      There might be a middle ground.

      I would not demand they sell cars – but put incentives on the table to entice them to do so.

  3. BrentP
    November 16, 2012 at 6:09 am

    The problem with leveraging the motorcycle dealerships is that it takes a order of magnitude more capital investment if not more to deal with cars effectively. Pushing that on to independent motorcycle dealers would probably go over poorly.

    About the only thing the motorcycle dealerships could have done is some sort of local intermediary for the closest car dealer. But that is an imposition and difficult to compensate a dealer for.

    It’s probably best they kept them separated.

  4. November 16, 2012 at 4:57 pm

    Yes, when Mitsubishi did that 0-0-0 financing offer, they devastatingly devalued their brand.

    I hadn’t thought of it, but you may be right about Chrysler too. We should know within a model year or two. Just watch to see if Fiat introduces any more fresh models like the Dart, or not. The new Viper is at least, an image investment.

    Who else? As I mentioned, am worried about Volvo.

    Mazda??? They don’t seem to have made any monumental screw ups like Mitsu. But they have at best, been “holding their own” against Toyota/Nissan/Honda. And now the Koreans are grabbing a huge chunk of that market. Mazda looks the most likely to lose even more of their small slice of the pie.

  5. michael.white
    November 16, 2012 at 5:12 pm

    “Being a tiny brand without the resources to R&D its own engines, Lotus bought them from someone else (Toyota) and hoped people wouldn’t notice – or care if they did.”

    The Toyota engine was the deciding factor for me buying my ’08 Exige – I can do drivetrain work cheaply and with parts from any parts store. I contemplated a Cayman, but didn’t want to pay Porsche parts & service prices.

    My Lotus handles better than any other car I’ve driven, and the engine’s reliable and easy to work on. But I’d never buy one again – they have a lot of quality issues, most of which have been solved for decades by other (especially Japanese) companies. I bought my ’08 new in late ’09. I’ve had five instrument clusters under warranty. Signal indicators have popped out. The alarm sensors have failed during long trips. Side windows leak in heavy rain.

    On top of that, the Lotus dealer & service network is small. That alone isn’t bad for a low volume car, but many seem dodgy. And my local dealer that carries higher-end cars treats Lotus as their bargain brand, for example by dropping the engine cover from wide open.

    • November 16, 2012 at 5:18 pm

      I agree the Toyota-sourced engine has numerous good points (and few objective flaws) but for what Lotus charges – pushing $50k, new – I’d want something more than a souped-up Corolla engine. No offense meant. The other issues you mention add to the negatives. I’d be pissed if I spent nearly $50k on a car and had to deal with mid-’80s Hyundai-esque quality control.

      Yes, they handle great. But one could probably get a new Miata to handle nearly as well for $15,000 less – and you’d still have a bulletproof, everyday-driveable car.

      Or, buy a Lotus 7 kit.

      • michael.white
        November 16, 2012 at 5:35 pm

        No offense taken – it’s pretty much a Celica GTS engine. I still prefer the mid-engine layout, something the Mazda isn’t. And for me it’s daily drivable, but I’m also the guy who drove all over Mexico in an ’82 Scrambler :)

        Agree on the price – my last foolish purchase a single man.

        • harry p.
          November 16, 2012 at 6:19 pm

          i also prefer mid engines along with toyota reliability so you could always go the mr2 route.
          obviously no new options but there are plenty of options from getting one fully restored (i did a partial rebuild of a mk1 supercharged) or getting it modified and it will cost a lot less than 50k. You could get a 3sgte (turbo mr2 motor) and stick it in a mk1 chassis and absolutely rip up the road.

          It’s too bad we aren’t in UK where Paul Woods does crazy stuff like this mk1 with an audi v8
          http://www.youtube.com/watch?v=3Ijj2EYd-Xk
          http://www.youtube.com/watch?v=R2VDG8uwXRE

          • michael.white
            November 16, 2012 at 7:38 pm

            I hadn’t thought about the MR2s at the time – I hadn’t seen one in ages and assumed they’d been out of production for quite a while. I did consider an older NSX, but to me the prices were still too steep for a car that age.

            I’m happy with the Lotus, it just sometimes pisses me off. And I wouldn’t buy another.

      • November 19, 2012 at 5:06 pm

        Holy crap, Eric! I hope you’re NOT saying that you want Lotus to engineer their own engines! They are a British company you know. And while the Brits are excellent at many things (such as being obnoxious, and having decaying teeth) automotive engineering is NOT one of them.

        • Me2
          November 19, 2012 at 5:30 pm

          Um, you do know that a majority of F1 teams are based in England right? You may also be interested to know that many major auto companies have contracted to Lotus to develop their performance engines over the years.

          Brits have plenty of issues and eccentricities but your comment is just plain ignorant.

        • November 19, 2012 at 5:30 pm

          Well, either that – or lower the price!

          I really like the Exige (and Elise) but they’re – my opinion – too expensive. To refine that a bit – they’re too close to Porsche expensive. $50k (the price of a Lotus) will just about buy you a Cayman coupe. The Cayman is not only a brilliant sports car, it is put together like a fine Swiss watch. The Lotus, unfortunately, isn’t. They have had a few problems with quality control. And even that aside, a Lotus is not a car most people – even enthusiasts – would want to drive regularly, let alone very day. The Cayman, on the other hand, is as easy to drive every day – and as reliable – as a Miata.

          Those problems – plus the Toyota engine – have hurt the car.

          Nothing wrong with the Toyota engine. But if I am paying “Lotus” money, I’d want a Lotus engine!

  6. MoT
    November 16, 2012 at 6:59 pm

    Sad. Still, it was inevitable from all of the signs. Mitsubishi is on a death watch as we type. Not that they’ll stop making vehicles overseas.

  7. ekrampitzjr
    November 16, 2012 at 7:17 pm

    The little noted side note is that Suzuki quickly announced that it will remain in the Canadian market, a far smaller automotive market than the US.

    Some comments are appearing elsewhere about the corporate culture at Suzuki US. According to people who worked for the company, the Japanese managers were arrogant and would not look at or talk to non-Japanese employees who weren’t management, for example. Turnover was horrendous among the gaijin.

    (Disclaimer again: I work at a low level for Mazda, and my immediate boss is from Japan. But he and the other Japanese here respect and rely on me and I’m happy to work my rear off for them. Far different culture. :) )

    It sounds more and more as if Suzuki leaving the US market had been inevitable for years./

  8. tom
    November 18, 2012 at 1:15 am

    Whaddya think about picking up a Suzuki Equator? (rebadged Nissan Frontier) Do you think there will be once-in-a-lifetime type of deals on Suzuki cars? I’ve seen the Nissan Frontier 4×4 crew cab, extended beds for $22k locally. Do you think the Equator equivalent would then go for subsequently less?

    • November 18, 2012 at 10:34 am

      The Equator, being made on the same line as the Frontier, ought to be just as good a vehicle as the Frontier. I can’t personally vouch for the current series, but the previous generation (compacts, last model year 2004) are outstanding little trucks. I’ve got two of them!

      As far as price: It depends on inventory, probably. If they have a bunch of them sitting around, you could probably grab one for a very good price as dealers will want to move them. Only a bit more than a month now until they are “last year’s” vehicles. I’d jump on it, if you’re serious.

  9. Fred
    November 18, 2012 at 2:05 am

    I spent much of the last decade as one of the Top 20 Suzuki salespeople in the US. I was well paid for the excellent job that I did, and I certainly enjoyed selling Suzukis more than some of the other domestic and import brands that I have represented over the last 30 years.

    I was sad to see the Swift discontinued in the US, and I owned one for 10 years, and would have bought another. Too bad that Suzuki never brought some of their more popular vehicles into or back into the US, including the Swift and the Jimny.

    By the way, the day after they announced their departure from the US, they announced that they are closing every manufacturing plant they have in Spain.

    Perhaps used Suzukis will crash in price, much like Daewoo did after they left the US, providing us consumers with some outstanding used car buying opportunities? Time will tell.

    A couple of says after Suzuki’s departure announcement, Mitsubishi announced that they are going to bring their smallest city car into the US, and soon. I enjoy and have owned city cars for decades, so I’ll be checking out this Mitsubishi when it arrives. And if the Tata Nano ever gets to America, I’ll be checking it out also.

    • November 18, 2012 at 10:32 am

      Hi Fred,

      This is one of the rare occasions when a car company fails – but not because of its cars. I’d buy a Suzuki myself.

      I’d be reluctant, on the other hand, to buy a Mitsubishi. I like their styling, but reliability hasn’t been the greatest – and they have among the worst depreciation rates of any current make. I hope they get it together. But if I had to bet….

  10. DD
    November 18, 2012 at 11:53 am

    The global establishment politico-banker terrorist organization member Sergio Marchionne told us that the global terrorists want 6 global car manufactures. You will see a lot more mergers and bankruptcies. Carlyle Group member Dan Ackerson was told to keep Peugeot alive in thanks for their support in Iran (Iran was one of Peugeot’s big markets).

    Suzuki was too small and offered nothing to the big political-backed/fascist companies. I thought the Kizashi was an excellent effort.

    Mitsubishi has nowhere to go and will withdraw from car manufacturing. Subaru partnered with Toyota so they do have a future. Mazda will partner or die but Ford already gave them up even though Ford profited greatly from Mazda efforts.

  11. December 6, 2012 at 9:46 pm

    I had an Aerio SX, which was a great little car, believe it or not.
    2 liter engine and a manual gear shifter. I had a lot of fun in it.
    I’m sorry to see them go too. The Vitara’s sold quite well though…

    • December 6, 2012 at 11:55 pm

      Me too. I’ve had nothing but good things to say about the last several Suzukis I test drove/reviewed. Usually, when a car company fails, it’s because the cars suck.

      That’s not the case here.

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