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Suzuki's US Future -- Good or Dismal

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  • nippononlynippononly SF Bay AreaPosts: 12,669
    edited April 2012
    From Automotive News today:

    Struggling Suzuki is shrinking in many ways.

    Insiders say the company is slashing marketing while sales and the dealer roster dwindle.

    The many signs of trouble:

    -- In a market up 13 percent through March, Suzuki was down 2 percent to just 6,561 sales.

    -- The brand skipped the Detroit and Los Angeles auto shows this year and suspended social media activity on Twitter and Facebook two months ago.

    -- Steve Younan, the top U.S. product planning and marketing executive, left in January and will not be replaced. No national TV commercials have aired since 2009.

    -- In January, Suzuki stopped getting customer satisfaction data from J.D. Power and Associates -- data that help track dealer performance. A memo obtained by Automotive News says another vendor will replace Power, but sources say no successor has surfaced.

    -- The dealer body continues to shrink. The brand shed 32 franchises last year, nearly 12 percent of its total. The number of U.S. Suzuki franchises has dropped every year since 2005.

    The company's strategy has become "very much focused on short-term profitability," says one source familiar with the company's recent cost-cutting moves who spoke on condition of anonymity. "They're limiting their future in the U.S."


    26,000 sales in all of 2011? This quote from the article is at the crux of the problem of course: ""The problem is that, while it's not a bad product, it's not on anybody's radar to look at," Kay (a former dealer) says.

    about 150 of Suzuki's remaining 246 dealers still sell five or fewer new cars per month, despite recent efforts to weed out poorly performing dealers.

    with more than half of its dealers selling five or fewer vehicles in an average month, Suzuki still has many dealers unwilling to focus on Suzuki and adequately promote the brand in their local markets, Morrell says.

    Many Suzuki dealers use their franchised-dealer status for easier access to financing to support big used-car operations, Morrell says.


    And no replacement for the Grand Vitara in sight? Soon there will be less than 200 dealers for the entire country, and how hard is it going to become to get warranty service? The critical mass just doesn't exist here to keep sales going in the U.S. I will always wonder why they didn't bring over the Swift, one of their best-sellers globally.

    This could all be turned around by a massive investment from the corporate offices in Japan - they need to seriously expand the dealer network (like double its size) and add two class-leading vehicles to the lineup, a midsize sedan and a proper Grand Vitara replacement. Then they need to blanket the airwaves with advertising so people actually consider a Suzuki when buying a car.

    But why would they do all of that? The U.S. is a saturated market and there are better opportunities for growth in the world, especially for the size of the investment they would have to make to grow in the States.

    The full article: http://www.autonews.com/article/20120416/RETAIL07/304169962/1117

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

  • They are leaving the U.S. market. I work at a Suzuki store! Everything points to them going out. You cant order cars, they came out with 0%x72 months to help clear inventories. They're no longer envolved with J.D. Powers. They dont advertise. No new models. I'd say by end of 2013 BYE BYE!
  • crkyolfrtcrkyolfrt Posts: 2,346
    I have owned a number of Suzuki's over the years. 3 Samurai's and 1 Sidekick.

    Only the Sidekick got somewhat acceptable fuel economy given the size and weight of the vehicle. The Samurai's got absolutely terrible mileage. Granted it was a small barn door on wheels that also rode a bit tall in the saddle, but a 1.3 in that vehicle could have done so much better with different tuning and gearing. Having free wheeling front hubs helped, but only a little.

    Then many years later their 4 door Sidekicks and whatever else that long 7 seater was called, all those things had an extremely thirsty V6 and its appetite for gas was ravenous for years and years with barely a 10th of a point better each year. Sort of like how thirsty Hyundai's V6 2.7 was in the Santa Fe for many years only actually worse.

    And this was during a time that America was discovering their insatiable desire for SUV types, both 4x4 and FWD.

    IMO, the only competitive fuel efficient cars they had for their size and weight were the Fireflys, Sprints, GEO's etc. The only problem with those cars was that they were not idiot-proof. In the right hands, those cars were very good cars with lots of longevity potential on few dollars. Sort of like the original Hyundai Pony only quite a bit better.

    By the time Suzuki had offered a more fuel efficient (by competitor standards) AWD to market..the SX4 etc. the market had already lost confidence.

    I think Suzuki should have cornered the market by offering a small turbo diesel in all their 4 wheel drive type vehicles, when everyone else had quit back around 1987 and earlier. This was long before stricter (politically driven/corrupt) emission standards dictated a squeezing out of diesel options in America and could have garnered the reputation for always having the diesel option when the likes of Toyota and Datsun (at the time) Mazda and Isuzu had dropped the ball.

    There have been some interesting transplants of VW's older turbo diesel 1.6 into the Samurai. Between that, and air bag assisted suspension mods, it completely transformed that vehicle into one with loads of torque, great fuel economy, and exclusivity in spades. Suzuki should have had their own aluminum block (for lighter weight and better handling) TD in that, and later the Sidekick, ages ago.
    Who knows, it might have made the difference in market share/strength to this day.
  • nippononlynippononly SF Bay AreaPosts: 12,669
    until Suzuki's exit from the U.S. market won't take long, based on what Auto News is reporting today:

    In an overall market up 14 percent, Suzuki sales through July were down 4 percent to 15,260.

    15,000 sales in 7 months? I am amazed that Suzuki dealers even bother to keep the franchise.

    ...At Suzuki, the outlook is even gloomier. On the bright side, freshened versions of the SX4 and the Grand Vitara will arrive this fall. And a heavily camouflaged, new-generation SX4 five-door hatchback has been spotted this summer during European testing.

    But sources familiar with American Suzuki's plans say that after this fall the company has no new or redesigned product launches scheduled before the 2015 model year.

    Derailed by yen
    The company's U.S. plans were derailed by a strong yen and its failed partnership with Volkswagen. For instance, Suzuki explored a number of possibilities for a redesigned Grand Vitara before the partnership unraveled, including a rebadged Volkswagen Tiguan, according to a source with knowledge of the plans.

    But that option, as well as the prospect of basing the next Grand Vitara on the Kizashi platform, has been scrapped.

    Suzuki also tested turbocharged versions of the Kizashi, but sources say it has no firm plans to introduce one.

    Another insider has said engineers and product planners had been working with Suzuki's Wagon R minicar sold in Japan to see if it might fit a niche in the United States. But that project has been dormant for months.

    Indeed, the company is saying nothing to reassure its 246 U.S. dealers. Asked about future products in the pipeline, Fujimoto said in July that "there is nothing to announce at this time."


    If there was ever a time or a car company for whom the writing was more boldly on the wall than this one, it wasn't in my lifetime. And it's a shame, because Suzuki makes very reliable and fun small cars, and it's not clear to me why they didn't flourish in the U.S. alongside the likes of Toyota and Honda, or at least Mazda and Subaru. Suzuki is a big company in Japan. The only thing I do notice is the MUCH smaller investment over time in American dealer network and advertising vs the Japanese heavy hitters.

    With no new product in the works anywhere, and especially in the 3-year timeframe, I would suspect that Suzuki will exit the U.S. by 2015 if not well before. I'm not one to make bold predictions like that, but it just seems so clear in this case. Perhaps if I am still around the Town Hall in 3 years' time, I will check in here on whether my forecast came true....

    http://www.autonews.com/article/20120827/OEM01/308279964/1428

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

  • I am a Suzuki dealer. For the entire 2000s no Suzuki dealer has sold more cars, on average, than me in our market (mind you, I'm not bragging. A good month for us, is a slow weekend for a Ford dealer). Working with ASMC is nothing but a fight every day. Getting cars is almost impossible, they want to give you what the have, not what you need. There is ZERO advertising in our market. The DOM only comes by to give you grief and make notations to enable ASMC to try to push you out as a dealer. Even though we are unquestionably the biggest volume dealer in our market, ASMC has been trying to push us out since late 2010, so there is nothing to this, "suzuki eliminating low volume dealer" BS.

    Over 500 dealers down to about 200 dealers

    100,000 plus sales to about 20,000 sales

    4 us market regions down to 3

    Sales Rep and separate Service Reg now one.

    Advertising down to no advertising

    7 car lineup down to 3 (you can't count the Nissan Frontier (Equator) in either of those numbers

    We only hang in there because there is no value to selling the franchise and things can't get worse. Suzuki has only two possible explanations for what they are doing. One is some master plan that will seem Steve Jobslike after it is revealed or, Two they have the most incomprehensible, incompetent and ignorant business model ever launched in the US.

    Why would a company with 40% market share in India want to mess around in a market where they have .4% market share?
  • lemkolemko Posts: 15,071
    Does Suzuki still have the Equator truck? Isn't it a derivative of the Colorado/Canyon?
  • nippononlynippononly SF Bay AreaPosts: 12,669
    No, it's a rebadged Frontier, but not for much longer. Nissan is updating the Frontier and the new version will not be rebadged a Suzuki.

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

  • fezofezo Posts: 9,195
    American Suzuki just file for chapter 11 bankruptcy and will wind down all its car dealerships.
  • bite down and chew on. Now I am glad I didn't buy a new Kizashi in 2010. I still would love to own one of them and, in fact, great deals might be had at this time, car nuts!

    2008 Mitsubishi Lancer GTS

  • Stever@EdmundsStever@Edmunds YooperlandPosts: 38,946
    Details:

    “I don't think it's a big surprise given their lackluster sales performance of recent years. They have have low margin, low-priced cars with small volume. That's far from the ideal combination,” said Jessica Caldwell, an analyst with auto information company Edmunds.com.

    The good news:

    "Suzuki said it will continue to honor warranties and will provide automobile parts and service through its parts and service dealer network."

    LA Times
  • iluvmysephia1iluvmysephia1 Posts: 5,663
    edited November 2012
    this will be good news for those who've bought Suzuki's in the 2000's.

    "Suzuki said it will continue to honor warranties and will provide automobile parts and service through its parts and service dealer network."

    2008 Mitsubishi Lancer GTS

  • fezofezo Posts: 9,195
    Now if I could only locate a Suzuki dealership..... We had one in town but it went as part of the GM dismantling of dealerships.
  • because I do think that the Suzuki Kizashi is the best value in a mid-size available. And the best looking as well. Too bad.

    2008 Mitsubishi Lancer GTS

  • Stever@EdmundsStever@Edmunds YooperlandPosts: 38,946
    edited November 2012
    Official Suzuki announcement and FAQ links.

    Might be tough getting parts and service even under warranty if your nearby dealers disappear.
  • hpmctorquehpmctorque Posts: 4,118
    edited November 2012
    I imagine that, given the low sales volumes for Suzukis, that most Suzuki dealerships also sell other brands. In that case most dealerships will survive and continue to carry Suzuki parts, and provide service. That's what happened with Isuzu, for example.

    The best deals for Suzukis will likely be, in the coming months, on near-new and 1-3 year old ones.
  • igozoomzoomigozoomzoom Waleska, GeorgiaPosts: 790
    edited November 2012
    You really can't blame it on the product. The Kizashi is still an outstanding vehicle even after three years on the market. The SX4 is far from the worst in class. The Grand Vitara is a handsome, clean design and the 4WD is actually off-road capable. And the Equator is arguably a better looking version of the Nissan Frontier. I'd buy any one of these over anything Mitsubishi has to offer!

    They did absolutely NO marketing and I've seen lemonade stands with a better business plans. Dealers were given little to no support. Every Suzuki dealership that I've ever seen (at least in the South) make most 'Buy Here, Pay Here' used lots look classy in comparison! And selling rebadged Daewoos may have increased sales for a few years, but it also diminished their already non-existent reputation...

    I don't see how ANY dealers have survived to this point. To make a profit with their sales volume, you need to be making Bentleys or Aston Martins.

    I'm anxious to see just how low prices will go to clear out the remaining inventory. It probably won't fall to Saab levels (as much as 50% off MSRP), but they had no warranty coverage and (toward the end) had to be sold as used even with 10 miles on the clock!

    As much as I like the Kizashi, I doubt I'd buy one even at 40% off or better. Long-term parts availability and repairs after warranty coverage expired would worry me, not to mention how hard it would be to sell down the road a few years!?!?

    The Equator is a pretty safe bet since it shares so much in common with the Nissan Frontier. But it would need some hefty discounting because right now it's priced several thousand bucks higher than a comparable Frontier!

    It's been a painfully slow death, so RIP Suzuki NA! Now Mitsubishi needs to do the right thing and go away!
  • Stever@EdmundsStever@Edmunds YooperlandPosts: 38,946
    edited November 2012
    To make a profit with their sales volume, you need to be making Bentleys or Aston Martins.

    Or at least BMWs.

    Good point about the co-sharing franchises Hpmctorque.
  • nippononlynippononly SF Bay AreaPosts: 12,669
    With no new product in the works anywhere, and especially in the 3-year timeframe, I would suspect that Suzuki will exit the U.S. by 2015 if not well before. I'm not one to make bold predictions like that, but it just seems so clear in this case. Perhaps if I am still around the Town Hall in 3 years' time, I will check in here on whether my forecast came true....

    Geez, as sure as I was when I wrote this that Suzuki wasn't going to make it in the U.S., even I didn't think it would happen in a mere two months.....

    The only Suzuki dealer I have visited this year still had unsold new cars from three model years ago on the lot. Doesn't take a genius to see there was no way for Suzuki to make it.

    With Suzuki folding up its tent, the bell tolls for Mitsubishi USA....without a complete rethink of the U.S. product line and a major investment in the dealer network, Mitsu will be the next to go. I would say five years or less will tell that story, no way they make it past 2020 without completely changing everything about the way they do business here.

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

  • Stever@EdmundsStever@Edmunds YooperlandPosts: 38,946
    You predict 5 years?

    Hm, the 3 year prediction for Zuke took 2 months.

    So by that reckoning, Mitsu has maybe until April 15 to follow suit. :shades:
  • fezofezo Posts: 9,195
    April 15 sounds about right.
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