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Old 6th November 2012, 10:44   #1
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Default Suzuki announces Closing of USA Operations. Filing for Bankruptcy

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Japan-based Suzuki said Tuesday that it was closing its American auto distributor and exiting the U.S. car market.
The company's U.S. arm, American Suzuki Motor Corp., will file for Chapter 11 bankruptcy protection in California. The company said it would wind down auto sales, but did not provide a timetable.

American Suzuki said it would honor all warranties, and indicated that parts and service should continue uninterrupted.
http://money.cnn.com/2012/11/05/auto...ki-bankruptcy/

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American Suzuki said it plans to emerge from bankruptcy as a company focused on selling ATVs, motorcycles and outboard marine engines. The company said it remains "firmly committed" to those product lines.
Quite shocking to me. Another Car Manufacturer bites the dust in the gloom doom of Recession. Too bad it had to happen in World's second biggest car market. Not sure how will it impact Indian market but given the increased pressure in remaining units, Expect More focus in Indian Market. It may be just the first step leading into a Chrysler-Fiat-Suzuki worldwide Joint Venture.

Last edited by anu21v : 6th November 2012 at 10:48.
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Old 6th November 2012, 10:59   #2
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Default Re: SUZUKI Announces Closing of US Operation. Filing for Bankruptcy

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Originally Posted by anu21v View Post


Quite shocking to me. Another Car Manufacturer bites the dust in the gloom doom of Recession. Too bad it had to happen in World's second biggest car market. Not sure how will it impact Indian market but given the increased pressure in remaining units, Expect More focus in Indian Market. It may be just the first step leading into a Chrysler-Fiat-Suzuki worldwide Joint Venture.
Suzuki is big only in India for quite some time.
In fact more then 50% of revanues are from MSIL this is due to the fact that government gave a virtual monopoly in formative years and they got a good headstart.
I think Suzuki needs such kicks from elsewhere so they take bread and butter market more seriously and treat the Indian unit with more respect.
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Old 6th November 2012, 11:10   #3
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Default Re: SUZUKI Announces Closing of US Operation. Filing for Bankruptcy

for more perspective, read this:
http://www.bloomberg.com/news/2012-1...e-decades.html

this means they will expend most of their energy and resources in markets where they are strong and India is the biggest for them. No point wasting time and money on a market that doesn't appreciate them. I think the Kizashi was the last throw of the dice in America and it didn't work.
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Old 6th November 2012, 11:27   #4
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Default Re: Suzuki announces Closing of USA Operations. Filing for Bankruptcy

Not surprised. Suzuki & Mitsubishi are considered garbage in the States. Hyundai was too, once upon a time, but the Korean brand successfully turned things around.

The only way Suzuki could sell cars in the USA was:

- Rebadging
- Discounts
- Zero profit finance schemes
- Offer finance to those who were rejected elsewhere

Think of Suzuki in the USA as Fiat is in India; whatever the brand does, the public simply doesn't want anything to do with it. Resale values are also extremely poor.

Of course, another reason is that Suzuki's core competence is in cheap, small cars. They simply haven't built a good big car, whereas the USA is primarily a big car market (Americans used to consider the Accord as a compact ). The Kizashi might be a worthy Civic / Corolla competitor, but it came too late to make a difference. Suzuki's image was already finished.

Suzuki could have just withdrawn from the market, but they'd get hammered by the tough dealer / franchise laws. Hence, the company filed for bankruptcy (thus, flattening their legal liability).

Last edited by GTO : 6th November 2012 at 21:08.
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Old 6th November 2012, 11:38   #5
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Default Re: Suzuki announces Closing of USA Operations. Filing for Bankruptcy

Good and Bad for India. It is always good to have products in our market which have global acceptance and meet global standards for quality, safety and emissions rather than just be for made for India.

Yep their focus will not get diluted much now from India which is huge for them, but inspite of being the largest manufcturer in India they would have had better chance of success in higher end products if they were to also sell them globally to meet better scale factors.
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Old 6th November 2012, 13:49   #6
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Default Re: Suzuki announces Closing of USA Operations. Filing for Bankruptcy

Am just thinking aloud, will it have any impact on the sales in India at all??
Given all that happened at Manesar and now the filing of Bankruptcy in the US, I feel the image that they have managed to make is getting tarnished day by day.

While it is in a way good for India that Suzuki will concentrate more on this market, it could also turn out to be bad if they start aggressively bringing in vehicles (which might go on and become market duds) just to make sure that they have a wide range of products in offer and they are VFM.

My two cents!
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Old 6th November 2012, 14:21   #7
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Default Re: Suzuki announces Closing of USA Operations. Filing for Bankruptcy

It was only expected. With no exciting models in the line up, Suzuki was well walking into the grave on its own.

Even in India, if Suzuki continues to offer the same mickey mouse designs (no offence to the cartoon characters!!), well it can soon start counting the days here as well. However, as our land is still obsessed with anything that's 'Maruti on wheels', Suzuki can stay afloat and breath free!!
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Old 6th November 2012, 14:24   #8
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Default Re: Suzuki announces Closing of USA Operations. Filing for Bankruptcy

Ironical piece of news!! Here they are, selling like hot cakes and Indians ready to lap up any Maruti-Suzuki car thrown at them. And they are filing for bankruptcy in the US.

As far as the Indian market goes, I do see this move impacting us too much. If anything, they will start focusing more on India and deliver more quality and world class cars for India.

In the current Indian scenario, I can think of Fiat and Mitsubishi going on similar lines in a few years. Who says the "Bell-Curve" does not work in the market. The bottom 5% get weeded out automatically.
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Old 6th November 2012, 14:40   #9
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Default Re: Suzuki announces Closing of USA Operations. Filing for Bankruptcy

Suzuki makes cheap and low on essence products which can sell in third world countries like India but can't hold ground in developed nations. I for one never went back to Suzuki for personal use after owning a plethora of their vehicles right from the 1st 800 DX (with leather seats which I still think was of better build than the current 800) to the 1000's and the Esteems, when I could afford none other and didn't have a choice either.

Nothing surprising at all.

Last edited by dkaile : 6th November 2012 at 14:54.
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Old 6th November 2012, 14:53   #10
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Default Re: Suzuki announces Closing of USA Operations. Filing for Bankruptcy

Hello,

This is indeed a suprise for most of us indians. When i was in US couple of months back, i read this here.

http://www.foxbusiness.com/industrie...ppear-in-2013/

Predicted way back . I hope they concentrate on their Indian business well to augment there sales and give some more VFM products. I still somehow feel MUL scores low when it comes to the pricing Vis-a-vis features. Barring top ends(ZXI/DI), all there variants are terriblly under featured.Not even a music system even in mid variant is too much i feel.
Look at Hyundai, the way they changed their fortunes in both Asian and N.A markets. Kudos to whatever strategy they adopted.

Nevertheless, i hope they would continue to perform strongly in Asian Markets considering their rapport.

Aloha
Shiv
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Old 6th November 2012, 15:02   #11
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Default Re: Suzuki announces Closing of USA Operations. Filing for Bankruptcy

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Originally Posted by hrman View Post
If anything, they will start focusing more on India and deliver more quality and world class cars for India.
Or on a negative note, they may try to wring out more profit from their biggest market, as many people here are still going gaga over the brand. But I don't think Suzuki is foolish enough to do that and lose their largest market.
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Old 6th November 2012, 15:54   #12
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Post Re: Suzuki announces Closing of USA Operations. Filing for Bankruptcy

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Originally Posted by Driving_Nomad View Post
Am just thinking aloud, will it have any impact on the sales in India at all??
I wouldn't have thought so. Two very distinct and differentiated markets. Hardly any commonality at all. Hits in the US have been bad misses here and vice versa.

Take the case of the Suzuki Swift for instance (rebadged as the Suzuki Esteem in India). It did enjoy some limited success initially in the early 2000s but has steeply declined from there. No other car from the Suzuki stable has been able to create a consistent impact there or has exactly set the sales charts on fire either.

Suzuki hasn't done well in the US at all. Period. They're light years behind other Japs like Toyota, Honda, Nissan, Mazda etc.. After a point, they have had no option but to file for bankruptcy.

As GTO has pointed out Suzuki has been almost "untouchable" in the US of late. However here in India, we couldn't be farther from that truth. MSIL is almost revered here and that is unlikely to change in a hurry come what may in the land of Uncle Sam.

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Originally Posted by Driving_Nomad View Post
While it is in a way good for India that Suzuki will concentrate more on this market, it could also turn out to be bad if they start aggressively bringing in vehicles (which might go on and become market duds) just to make sure that they have a wide range of products in offer and they are VFM.
Again 2 very disconnected entities D_N. I doubt the reversal in the USA will either increase or decrease Suzuki's focus on its Indian business. Moreover I don't think the American arm will start influencing its Indian counterpart just because they've had to shut shop. If at all, it should be quite the opposite because it is the Indian arm that is flourishing right while things have gone kaput for them in the biggest automobile market in the world! Right?!

Last edited by Omtoatom : 6th November 2012 at 15:57.
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Old 6th November 2012, 16:06   #13
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Default Re: Suzuki announces Closing of USA Operations. Filing for Bankruptcy

Not surprising. Suzuki was always a fringe player in the U.S. market.
Unfortunately their success with their bike division never rubbed onto their car operations. The Vitara enjoyed limited success but sadly the Kizashi (a pretty competent vehicle in its own right) failed to evoke much response from the Yanks.
With sales of less than 20,000 units per annum, i guess it just does not make sense to continue in the US of A anymore.
They are better off in India and other emerging markets who prefers their smaller vehicles.
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Old 6th November 2012, 16:57   #14
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Default No More Big Suzukis!!!

Well thats effectively the end of big Suzukis then!!!

Suzuki made the likes of XL7, Kizashi focused primarily on the US market and there is no reason to make them anymore now. In Europe and Asia Suzuki is a small car brand, no one thinks of Suzuki when they buy family saloons or SUVs.

The Kizashi was a terrible mistake.
Its a brilliant car no doubt, well engineered and built, better than many established rivals, but it was the wrong car for Suzuki. They spent more than 1 Billion US dollars on the Kizashi project; to put it into perspective it took less than half that to make the Swift. That money could have been better spent elsewhere.

In a way the US bankruptcy is a blessing in disguise for Suzuki. At least now they can put a stop to this dream of making bigger upmarket models or being a volume player in the US.

Their strengths lie in making cheap economical small cars and UVs. Subaru, Opel, Nissan, Vauxhall etc..etc.. have relied on Suzuki made cars when it comes to the cheaper models in their portfolio. This is what Suzuki do best and what they should continue to focus on!!
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Old 6th November 2012, 18:50   #15
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Default Re: Suzuki announces Closing of USA Operations. Filing for Bankruptcy

It is sad really, but what is the big deal. Its not like Indian chart toppers will have sure shot sucess in the US and US toppers are selling like hot cakes in India. Both are very different markets.

I do not think it will effect Suzuki India in the slightest, these guys alone sell as much as the whole industry combined more or less. And regarding image of Suzuki deteriorating, I really don't think the average Alto or Swift buyers has US trends on his mind.

If anything I feel this will be a good thing they can focus more on the Indian market, imagine the Suzuki Equator coming to India and selling in direct competition with the likes of Fortuner how will that be. One can dream I guess.
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