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Suzuki's US Future -- Good or Dismal

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  • iluvmysephia1iluvmysephia1 Posts: 5,713
    (kei-class)cars are the top-selling very small cars in Japan. And they've held that title for a long time, too. I think that is saying something about Suzuki and their build quality and build capabilities. The Suzuki SX-4 crossover is generally being very well received and though the SX4 Sport sedan is new, still, reviewers test drives have yielded very positive reports on the small 4-door sedan. I generally like Suzuki, but, being smitten by Mitsubishi, while still keeping a good eye on what Kia is prooducing, there is no buying room left for us. Still, if I was in the market right now, I would give the SX4 duo a good look-see.

    2011 Kia Soul Sport 5-speed

  • oldfarmer50oldfarmer50 Posts: 6,808
    "...the top selling small cars in Japan..."

    With gas at $3.50 a gallon any company that can deliver a 30+ mpg car for a good price will have a bright future.

    2009 PT Cruiser, 2008 Eclipse, 1995 Mark VIII, 1988 GMC Van

  • nippononlynippononly SF Bay AreaPosts: 12,695
    "I generally like Suzuki, but, being smitten by Mitsubishi, while still keeping a good eye on what Kia is prooducing, there is no buying room left for us"

    Right there, in a single line, you have exactly encapsulated Suzuki's problem: they aren't the biggest brand, or the best-built brand, or the cheapest brand, or the brand with the longest warranty, or the Japanese fave brand. Every corner of the market is already covered by someone else, and that leaves Suzuki.....not standing out. I'm not sure what they can do to combat that problem.

    2013 Civic SI, 2009 Outback Sport 5-spd (stick)

  • Right there, in a single line, you have exactly encapsulated Suzuki's problem: they aren't the biggest brand, or the best-built brand, or the cheapest brand, or the brand with the longest warranty, or the Japanese fave brand. Every corner of the market is already covered by someone else, and that leaves Suzuki.....not standing out. I'm not sure what they can do to combat that problem.

    But they do have a very long warranty...7-years/100,000 miles is very good when compared to just about anyone. While they're not the least expensive, they offer something different and more interesting than the typical appliance that is sold at their price level. Not being the biggest brand is a PLUS...for $15k, you won't find your neighbor driving the same car as you.
  • nippononlynippononly SF Bay AreaPosts: 12,695
    Well, HyunKia have the long warranty corner covered - they have publicized their warranty very well, they are known for it now, and their prices undercut Suzuki's.

    But others have the 100K warranty as well: GM, Chrysler, and Mitsubishi IIRC? Mitsu has a longer B2B warranty as well, beating pretty much everyone bumper to bumper.

    Not being the biggest brand can be a plus, until you look around and suddenly discover you are one of the smallest and your sales are shrrrriiiiiinking...

    2013 Civic SI, 2009 Outback Sport 5-spd (stick)

  • Suzuki has publicized their warranty well. It's longer than GM's 5-year. And Mitsubishi, Isuzu, and Hyundai/Kia moved to the 10-year warranties as a last-ditch effort to save their brands, which worked wonderfully for Hyundai/Kia but not so well for Mitsubishi and Isuzu.

    Not being the biggest brand can be a plus, until you look around and suddenly discover you are one of the smallest and your sales are shrrrriiiiiinking...

    That would be true if we were talking about Isuzu (gone next year) or Mitsubishi (sales in the US down 14% in 2008), but not for Suzuki (sales down 5% in a market that's down 8%).
  • nippononlynippononly SF Bay AreaPosts: 12,695
    Well, hold that thought on Mitsubishi - they could be about to do the most miraculous turnaround in the car biz in quite some time. All signs are good, but who knows, it could just be a flash in the pan.

    As for shrinking sales at Suzuki, I agree that their sales are far from falling off a cliff, but you have to keep in mind that they are exporting most of their cars to the States from Asia (the only one I can't remember is the XL7 - it has GM running gear, is it built in a GM plant here in NA?). As such, there has to be a minimum volume to make the business case for keeping operations going over here, and I think their big sales plan developed a few years ago that went FLOP loudly with the recent resignation of the NA CEO was in fact created to deal with this problem. They need to double their sales in the U.S. for the business model of doing so to make sense.

    The same is not true of motorcycles and ATVs however, from what I can tell. That is actually a much more profitable business for Suzuki in America than cars and SUVs are.

    The Equator could add substantially to sales at minimal cost to Suzuki, beginning this summer. I am sure that is Suzuki's hope. Me, I remember when Mitsu rebadged a Dodge Dakota and sold 3000 of them all year (the year being 2007 - what the heck was that Mitsu pick-up even called? I have already forgotten). That model is now being discontinued. I think it likely that sales of the Equator (what a name!) will follow a similar path.

    After all, why not just buy the Frontier? there are more dealers in the Nissan network by far, better selection of options and configurations when buying new, better availability of parts and know-how for servicing (especially a few years on), and no advantage to the Suzuki label beyond the 100K warranty.

    2013 Civic SI, 2009 Outback Sport 5-spd (stick)

  • gussguss Posts: 1,181
    what the heck was that Mitsu pick-up even called? I have already forgotten

    The Raider was a Dakota on steroids. In their commercial it was supposed to scare the other trucks. I guess the Raider ended up going home with it's tail behind it.
  • Well, hold that thought on Mitsubishi - they could be about to do the most miraculous turnaround in the car biz in quite some time. All signs are good, but who knows, it could just be a flash in the pan.

    Mitsubishi has much to make up for and not much coming in the way of new product. The updated Galant is just "updated." The Lancer is their "hit" and it's not making up for the losses in the rest of the lineup. Add all of that to the cost of Mitsubishi's self-owned and vastly under-utilized US plant...and Mitsubishi's in bigger trouble than Suzuki.

    If they make this "miraculous turnaround," more power to them. I've just heard all that before.
  • nippononlynippononly SF Bay AreaPosts: 12,695
    Well, Lancer sales are up significantly on the redesign, so I heard.

    But I think the American plant makes Galants and Eclipses, where sales are DOWN substantially, so that's a prob for Mitsu.

    By contrast, Suzuki doesn't manufacture ANY of its models locally, so the yen-dollar exchange rate just keeps dragging profits down. And with 100K sales per year, it is inevitable that dealers will begin to stray from the pack in ones and twos, except for the megastores with 20 brands on sale. And megastores aren't very good for Suzuki's interests, as little effort is made to promote Suzuki specifically at those types of places...

    2013 Civic SI, 2009 Outback Sport 5-spd (stick)

  • By contrast, Suzuki doesn't manufacture ANY of its models locally, so the yen-dollar exchange rate just keeps dragging profits down.

    Suzuki has been pushing a national TV and print ad campaign, which seems to be much more prominent than the subtle ads being run by Mitsubishi. And Suzuki does indeed produce models locally...the XL7 is produced in a plant co-owned by Suzuki and GM just across the border in Ingersoll, Ontario.
  • nippononlynippononly SF Bay AreaPosts: 12,695
    Yeah, I had a feeling they built the XL7 in a GM factory here in North America...I asked earlier but no-one answered....

    2013 Civic SI, 2009 Outback Sport 5-spd (stick)

  • iluvmysephia1iluvmysephia1 Posts: 5,713
    Mitsubishi Outlander SUV, and it's sales upswing. Now, I would not say that Mitsubishi is out of the woods, but, I didn't chew my fingernails off worrying about them when I bought my '08 Mitsubishi Lancer GTS, either. I think they'll ride this storm out. Bringing an all-EV i-MIEV to the States with an improved range worked out wouldn't hurt them, too. The Galant re-design is an improvement and the EVO X will also help them out a bunch. I don't worry about Mitsubishi's success in the States nearly as much as I might worry about Suzuki's continued staying power in NA.

    They're going to have to start selling a lot more SX4's, XL-7's, Grand Vitara's, etc. to keep afloat. 2008 may be very telling on their NA future.

    2011 Kia Soul Sport 5-speed

  • dtownfbdtownfb Posts: 2,915
    the issue facing Suzuki (the same can be said of Mitsubishi and Subaru ) is they want to grow their sales in a down market. The North America market has to the toughest, most saturated market in the world. With overall car sales declining again this year, I don't see how they can expect sales growth. I see Suzuki as another division of GM. The SX4 is OK. The bad part about this vehicle is it's small but not near as fuel efficient as its competitors. Who really needs AWD? Most buyers can navigate most bad weather with FWD and good set of tires.

    I think each of these companies needs to set realistic sale goals and adjust their business practices accordingly. it's a tough market.
  • the issue facing Suzuki (the same can be said of Mitsubishi and Subaru ) is they want to grow their sales in a down market. The North America market has to the toughest, most saturated market in the world. With overall car sales declining again this year, I don't see how they can expect sales growth. I see Suzuki as another division of GM. The SX4 is OK. The bad part about this vehicle is it's small but not near as fuel efficient as its competitors. Who really needs AWD? Most buyers can navigate most bad weather with FWD and good set of tires.

    I think each of these companies needs to set realistic sale goals and adjust their business practices accordingly. it's a tough market.


    It's absolutely a tough market, but when was the American market easy? Maybe 1947?

    Suzuki's AWD sets it apart from the other $15,000 compacts...and when the market is that competitive, it takes something distinctive. It's the same thing that set Subaru apart when they were floundering in 1995.

    And where Suzuki is just about flat in a down market, Mitsubishi is most definitely down. Outlander sales are down from last year (about 44%), Lancer and Galant sales are up (13% and 24%, respectively), but they still don't amount to much (13,754 between them in the first quarter). The sales difference between Mitsubishi and Suzuki is marginal (240 units between them in March, 652 in the quarter), but Mitsubishi is supporting a vastly underused UAW-led factory. Mitsubishi has been on the ropes for years while Suzuki is at or near record levels in the US.

    They absolutely need to set realistic goals. Suzuki's dream of 200,000 in the US was pie-in-the-sky thinking and unless they come up with the next big thing, they should be content with 100-120k. Mitsubishi, even with the few EVOs they'll sell, should also be happy with 120k in the US...so long as they ditch the plant. If Mitsubishi wants to keep its US manufacturing base, it should think about subleting to someone who needs the space, because Mitsubishi products won't need it anytime soon.
  • nippononlynippononly SF Bay AreaPosts: 12,695
    got dumped by Chrysler, which is why they have so much space in that plant. I agree that there seems to be little point in their continuing to be its sole occupant...perhaps they could find a partner to share it with them, like Subaru did in their Indiana plant.

    As for growing sales in a down market, Suzuki wanted to grow them five years ago, in what has turned out to be the largest market, and fastest-growing, in HISTORY in the U.S. 2005 still stands as the highest sales year ever, I believe. They couldn't increase sales when EVERYBODY was selling everything they could turn out. It is HIGHLY unlikely they will be able to grow them now. I am waiting to see how the CEO resignation will shake out in terms of scaring the dealer body.

    2013 Civic SI, 2009 Outback Sport 5-spd (stick)

  • got dumped by Chrysler, which is why they have so much space in that plant. I agree that there seems to be little point in their continuing to be its sole occupant...perhaps they could find a partner to share it with them, like Subaru did in their Indiana plant.

    Similar story behind the two plants. Mitsubishi launched their plant and brought Chrysler in as a partner, but Mitsubishi bought Chrysler's share out years ago. Mitsubishi continued to make vehicles for Chrysler until the last of the coupes went out the door. But Mitsubishi's occupation of the plant was in trouble before then when their own market share went into freefall and Galant sales fell about 70% (and Endeavor sales never hit volumes that it was planned to hit).

    Subaru's partner sold out when Isuzu decided to stop selling their own vehicles. Subaru found Toyota to take over part of the plant, but atleast Subaru was using their half of the plant...the same could not be said for Mitsubishi.

    Suzuki's problem was that they are a small car company and BIG cars (and trucks) were selling in the US. If there's going to be any time for Suzuki to gain market share in the US, it's now when gas prices are high and demand for smaller cars is growing. But they need to get the proper vehicles (like the Swift) onto the market NOW! Waiting a year or two gives everyone else time to get quality small cars on the market. Strike while the fire is hot!
  • lemkolemko Posts: 15,205
    ...you'd think Suzuki's kei cars would be popular. Forget building some stupid cross-over SUV wannabe like the XL7 and bring over some of those kei cars for which Suzuki is so well-known in its home market.
  • nippononlynippononly SF Bay AreaPosts: 12,695
    Well, kei cars are tiny cars the size of the Smart, with 0.6L engines making around 50 hp. Sure, they get fantastic mileage, but they would face all the same overwhelming tirades of criticism that we have seen expressed here at Edmunds and other places for the Smart car.

    It would be cool to have something for sale here that was really different from all the schlock we have now though.

    And I am always for any and all possible JDM models making their way across the big water... :-)

    2013 Civic SI, 2009 Outback Sport 5-spd (stick)

  • nippononlynippononly SF Bay AreaPosts: 12,695
    Suzuki has the longest time-to-turn inventory of the entire industry right now, at 127 days average time:

    http://www.autoobserver.com/2008/04/speeding-and-li.html#more

    Hyundai and Kia are close behind, so I guess they are doing really badly this year too.

    Interestingly, I noticed recently that they are now running TV ads for the SX4 hatch, which come on the heels of those ads that were running showing both the hatch and the sedan. I guess they figure they had better get their name out there a bit more.

    2013 Civic SI, 2009 Outback Sport 5-spd (stick)

  • jagat101jagat101 Posts: 5
    Suzuki should bring over the Swift (though designed for EURO crash safety standards) on short notice, now that gas hovers nearly $5 in some places...esp here in CA.

    Ford as of this writing is scrambling to ship over previously EURO only models..and would work on certifying their respective crash safety requirements, previously EURO only and soon to be up to US standards.

    If Ford can do this, why not the Suzuki on the Swift?...
  • steverstever Viva Las CrucesPosts: 41,942

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  • nippononlynippononly SF Bay AreaPosts: 12,695
    here is another car industry executive, one directly employed by an automaker in this case, predicting the consolidation of the Japanese auto industry into the "Japanese Big Three". And of course, he doesn't think Suzuki will be one of the 3!

    Consolidation City. I hope Subaru remains independent a while longer. I wouldn't much mind if Suzuki were swallowed up by Nissan or Toyota.

    2013 Civic SI, 2009 Outback Sport 5-spd (stick)

  • steverstever Viva Las CrucesPosts: 41,942
    Well, Toyota owns about 16% Subaru now, so someone could buy into Suzuki. Like ... Fiat?

    GM did have a stake in Suzuki (~20% at one time), but I guess that's all been sold off in the last couple of years.

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  • nippononlynippononly SF Bay AreaPosts: 12,695
    Well how about that! I never knew Fiat sold a rebadged Suzuki!

    2013 Civic SI, 2009 Outback Sport 5-spd (stick)

  • boaz47boaz47 Posts: 2,750
    I could say quality birds of a feather but I won't. :P I have had a soft spot for Zooks for a long time. But I used to like Fiat and Alfa as well. Dependability has never been a strong suit for either of them but they could be fun to drive. But i guess a hope for increased sales because of $4.00 or $5.00 gas was dashed before it got under way. I scanned some of the posts from the last two years to see just how far off the mark we could be on where things were going. Most of us in edmunds must predict trends by flipping a coin. ;)
  • berriberri Posts: 4,270
    Just because its Japanese doesn't mean it is good. There have been Japanese junkers as well as American and European.
  • steverstever Viva Las CrucesPosts: 41,942
    "The cuts and Suzuki's low level of sales lead experts to wonder how long the automaker will remain in the U.S. market."

    Suzuki Slashes U.S. Staff -- Again (AutoObserver)

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    Minivan fan. Feel free to message or email me - stever@edmunds.com.

  • I may jump on board.

    image

    I'd like one with a 5-speed tranny and in jet black like this one. Hot-hot-hot!

    2011 Kia Soul Sport 5-speed

  • nippononlynippononly SF Bay AreaPosts: 12,695
    You might be a good candidate for a Cube, available right now!

    2013 Civic SI, 2009 Outback Sport 5-spd (stick)

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