Tuesday, 6 November 2012

Suzuki stops selling cars in USA, America - To Focus only on Motorcycles

Japan's Suzuki Motor Corp said it will shutter its unprofitable automobile sales business in the United States and instead focus on its motorcycle, ATV and marine boat sales, as it fights a strong yen and slumping U.S. demand for its small cars. 

American Suzuki Motor Corp, the sole distributor of Suzuki Motor Corp vehicles in the continental United States, will file for Chapter 11 bankruptcy protection with $346 million in debt, of which $173 million is owed to Suzuki group companies, it said. 

Japan's No. 4 automaker said in a statement that it would be unable to maintain profitability in its automobile business in the United States, given the currency rate and its automobile lineup, made up primarily of small cars. 

American Suzuki, which sold 2,023 vehicles in the United States last month, plans to compensate car dealers as it phases out automobiles to focus on motorcycles, ATVs and marine boat products. 

Shares of Suzuki were down 1.7 percent at 1,802 yen in early morning trade. 

Suzuki sold about 26,000 vehicles in the US in 2011, a fraction of rival Japanese automakers such as Toyota,Nissan and Honda

ASMC "recognised it will be unable to maintain profitability with respect to its automobile marketing business", the firm said in a statement. 

The Suzuki division, which employs about 365 people, said it has faced difficulties from the value of the Japanese currency and weak demand for its compacts in the US market. 

The yen, which hit record highs against the dollar last year and remains strong, has dented Japanese manufacturers by making their products less competitive overseas while eroding the value of repatriated foreign income. 

Suzuki's US unit said it would "redirect" its resources to the sale of motorcycles, ATVs and marine products "where the prospects for profit are good". 

Warranties on vehicles already sold in the US market would be honoured despite the filing, it added. 

The Japanese firm has focused much of its attention on emerging markets including India where its profitable Maruti Suzuki joint venture is the nation's biggest automaker.


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