Low sales have been the main factor that has led to Suzuki Motor Corp’s decision to stop selling cars in the US.
Business as usual on the Suzuki America website |
After a presence of nearly thirty years, the company has faced a number of challenges which have led to the decision. The strength of the yen, a limited number of models, high cost of production and tight state and federal regulations have all played a part in driving down profits.
A specialist in small cars, Japanese-based Suzuki is the leader in car manufacture in India’s emergent market. The company has decided that its US focus will be on motorcycles, all-terrain vehicles and marine equipment such as outboard motors. The brand’s sole distributor, American Suzuki Motor Corp, has filed for Chapter 11 bankruptcy protection.
At the height of the market in 2007, Suzuki sold 102,000 vehicles. Its original intention was to sell more larger vehicles but the financial crisis in 2008 and the sharp rise in fuel prices put paid to the plans. A further blow was the collapse of its partner General Motors Co. with Suzuki being forced to dissolve its joint production in Canada.
A strong yen has affected the profitability of Suzuki’s Japanese exports and the small car market competition from the US and South Korea has not helped the company’s bottom line. Its fiscal year ending in March 2012 saw the sale of around 26,000 Suzuki vehicles in the US, causing a $15.8 million net loss for the American company. Suzuki promises to maintain its after-sales service for vehicles already sold in the US.
Suzuki's withdrawal from the US follows another small car maker - Daihatsu Motor Co's - decision last year to withdraw from the European market by 2013.