Dominant player of the Indian market, Suzuki files bankruptcy in the US

Dominant player of the Indian market, Suzuki files bankruptcy in the US
author image CarTrade Editorial Team
Wednesday 07 November 2012, 11:31 AM

Japan based Suzuki Motor Corp has decided to move out of the US market as the company failed to make profit even after several efforts. The company has been present in the United States for almost three decades; however, it has decided to close selling its vehicles in the country owing to a strong Yen and Suzuki's few cars in the US, which failed to lure buyers.

Dominant player of the Indian market, Suzuki files bankruptcy in the US

On the other hand, Suzuki in partnership with Maruti has been the ruler of the auto industry in India. Maruti Suzuki India Ltd. is the largest and most trusted car maker of India with a large number of vehicles across a large number of segments.

Suzuki on Tuesday, November 6, said that its US subsidiary would file Chapter 11 bankruptcy in a federal court in California to close its auto business and to instead focus on the sales of motorcycles, boats and All Terrain Vehicles (ATV).

The company had been trying to make a place for itself in the world's second-largest auto market for the last 27 years. However, its departure would benefit other auto makers, especially Kia Motors and Nissan Motors, which are quite popular in the US.

Suzuki cars failed to attract buyers in the United States and the company suffered also because no investments were made in new vehicles. Moreover, a strong yen made shipment of vehicles from Japan more expensive. The auto maker sold 21,188 vehicles in the US through October in 2012, which was 5 per cent lower than what it sold during the same period in 2011. This became even more disappointing for the company because the overall market this year was up by 14 per cent and Suzuki became the second lowest selling mainstream brand in the country.

Suzuki had marketed the Kizashi sedan and Grand Vitara SUV in the United States recently and customers must be worried about the warranty on these vehicles. Ending all speculations, Suzuki made it clear that the company would continue to honour warranties during bankruptcy and that the company would not need any financing from outside for restructuring.

The Japanese auto giant eyes to buy the motorcycle, ATV and outboard engine operations out of bankruptcy and would limit its operations to servicing the already sold vehicles. Suzuki's bikes are widely acclaimed worldwide; therefore, the company plans to focus on motorcycle business in the United States.

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