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Suzuki's US Future -- Good or Dismal

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  • steverstever Viva Las CrucesPosts: 41,884
    "Suzuki Motors closed all of its plants in Japan until Thursday, March 17, after which the company said it will assess the situation. The closures affect the Takatsuka plant, which assembles motorcycle engines; the Kosai passenger car assembly plant; the Iwata multi-purpose vehicle and commercial vehicle assembly plant; the Toyokawa motorcycle and outboard motor assembly plant; the Sagara passenger car and engine assembly plant and the Osuka plant foundry, the company said."

    Quake Aftermath Severe, Deep Auto Sector Impact (AutoObserver)

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

  • fintailfintail Posts: 34,293
    I saw an abandoned Suzuki dealer somewhere in Georgia...kind of eerie, you could see the outline of the S on the building, but it was a ghost town
  • nippononlynippononly SF Bay AreaPosts: 12,693
    edited March 2011
    Suzuki's deep dive

    •The credit crunch of 2008 blew up the subprime market, the heart of Suzuki's business.
    •Poor vehicle quality squelched return business and created toxic word of mouth.
    •Dubious practices by some stores, such as "no payments for life" promotions, akin to real estate balloon mortgages, led to lawsuits and bad publicity. And the go-go marketing philosophy of stair-step incentives was hamstrung by a no-go auto market. A suit by a former high-volume dealer alleges that Suzuki pressured him to file phony sales reports to keep the bonus merry-go-round turning.
    •In a rush to add dealers, Suzuki added some used-car sellers who wanted the cachet of a new-car franchise to boost used-car sales but didn't work to build the Suzuki brand.
    •Suzuki's U.S. sales plunged to fewer than 24,000 units in 2010 -- a drop of more than three-quarters from 2007, when the brand sold 101,884 units here.
    •By the start of this year, Suzuki had 278 U.S. franchises -- down from 537 in 2007. Of Suzuki's 50 highest-volume stores in 2007, at least 35 are no longer in business. The fallout of high-volume stores is most telling. Most of Suzuki's growth had been fueled by a small group of dealers who owned most of the high-volume stores. Reliance on subprime financing and stair-step factory incentives ultimately forced nearly all of the brand's biggest dealerships to close.

    "What you're seeing is a brand that couldn't get market momentum, tried to get it and did everything that everybody else did -- but did it at the wrong time," Johnson says.


    Ties to GM

    Suzuki's expertise as a manufacturer of well-built small cars had made it a powerhouse in Japan and emerging markets, including India. But it lacked the larger cars preferred by U.S. customers.

    That made Suzuki's 30-year ties to General Motors central to increasing U.S. sales.

    In 2002, GM, Suzuki and Chinese automaker SAIC bought the assets of Korean automaker Daewoo out of bankruptcy. That seemed to give Suzuki what it needed for the United States: a source of larger cars.

    Suzuki launched the Forenza compact and Verona mid-sized car in 2003, followed by the Reno wagon in 2004. The cars immediately boosted Suzuki's volume. They accounted for about half of Suzuki's sales in 2004, 60 percent in 2005 and 2006 and 42 percent in 2007, according to the Automotive News Data Center.

    But the quality and reliability of the cars were subpar.

    Suzuki's 2004 models were ranked as the second-worst in the J.D. Power and Associates 2007 Vehicle Dependability Study. Suzuki vehicles had 324 problems per 100 vehicles compared with the industry average of 216 problems.

    Akin acknowledges the "problematic" quality of the GM Daewoo-sourced Forenza, Reno and Verona. He adds that during his tenure Suzuki had all but phased out the vehicles.

    Jerry Goldstein, president of Five Star Suzuki in Altoona, Pa., and a former chairman of Suzuki's dealer council, says the GM Daewoo-sourced Suzukis generated an "unbelievable" number of warranty claims. Some came back with engine or transmission failures within a year.

    (From one former dealer): "If you could imagine the worst-managed company in the world, it would have had to have been Suzuki."

    "They OK'd the rebadging of inferior Korea-built products. They knew they were junk from day one. They were so set on getting to 200,000 units that people signed off on it."

    Koichi Suzuki denies that the brand promoted a subprime-focused business model. But dealers couldn't resist the prospect of big paydays from hitting stair-step targets.

    "More profits, more business ... it's tough to stay away from that," Koichi Suzuki says.

    Suzuki is at a turning point in the United States, by far the automaker's smallest major market.

    Its North American unit has posted operating losses for three straight years, and Suzuki Motor Corp. executives in Japan sound far from bullish.

    In a Feb. 7 conference call, Takao Hirosawa, senior operating officer of Suzuki Motor Corp., said: "Regarding the timing of return to the black in North America, we are making efforts to erase the minus, and in that sense, our vehicle business is getting considerably better.

    "The minus is disappearing. But we are not setting a clear target timing of when we will return to the black."


    http://www.autonews.com/apps/pbcs.dll/article?AID=/20110321/RETAIL07/303219964/1- - 117

    Read the whole thing - it's even worse than those excerpts point out. It affirms what everyone has been saying, including me: what brought down the reliability ratings to put Suzuki in the CR cellar a few years back was the garbage coming out of GM/Daewoo with a Suzuki badge on it. That was the stupidest decision ever made by an auto exec anywhere, and there really should be a price to pay for it beyond the dumping of those executives.

    2 years left, maybe 3, for Suzuki in North America?

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

  • carthellcarthell Posts: 126
    AAAAGGGHHHHH!

    Way to go, Suzuki! I couldn't - wouldn't - have found such an efficient way to severely cripple your north American operations if I were in charge of the company!! Thanks a lot!!!

    In other news closer to the home front, my favorite independent fix-em-up store had the resources to perform a 120k-mile service interval without a delay. It probably was helped by all the cash I spent last year to fix sudden breakdowns and replacements.

    I managed to avoid going to a separate metropolitan area to get the car fixed...this time.
  • joeyrabjoeyrab Posts: 65
    Here's where I scratch my head a little......
    How could the public forgive the attrocities Kia put out 10-12 years ago like the Sephia for example, and not let Suzuki get a better foot hold. Suzuki should be where Kia is today. From what I understand, Kia was going to be "bought out" or (helped out) by the Korean government but they renegged? So Hyundai bought them...now Kia is selling more cars than friggen Honda. Why can't someone do this with Suzuki, AND I don't mean der commisar Volkswagon. That relationship isn't doing anything for Suzuki right now. If Volkswagon maybe turned their dealerships into Suzuki/VW dealerships, Suzuki could generate more business, that's a gaurentee.....I mean as far as Suzuki autos go, they are pretty solid. The motors are tough, use timing chains, have everything compartmentalized well....they actually take a beating..I'd say they are tighter than Kia's 4 cylinders.....so what the hell gives?
  • nippononlynippononly SF Bay AreaPosts: 12,693
    HyunKia spends a HECK of a lot more money on marketing in the States, that's all the difference is.

    But it doesn't help that Suzuki offers very few models and has had a lot of model turnover in the last few years. With no model living enough to get a good rep, no-one knows what a Suzuki is.

    And there is no way you are ever going to see VW dealers paired with Suzuki, except maybe at corporate dealers with a half dozen brands or more. All the smaller VW dealers very much value the European "air" their dealerships and product have....

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

  • joeyrabjoeyrab Posts: 65
    edited May 2011
    I bet at least half the people that walk into a VW/Suzuki Dealership for a Golf or Jetta, leave with an SX4 or Kazashi for one reason or another. Looks, price, features......
  • igozoomzoomigozoomzoom Waleska, GeorgiaPosts: 797
    Suzuki has several major issues holding them back-

    1) Limited dealer network- there are simply too few Suzuki dealers to sell their vehicles in significant numbers.

    2) Most of the dealerships that do exist are decidedly 'low rent' in appearance and operation (I know of several that are trailers in the middle of small gravel lots, very classy)! Inventory is always very thin, making specific trim levels and/or colors difficult to locate. Then there's the green and/or idiotic sales staff with NO product knowledge or customer service skills. As a whole, we'll call this an "IMAGE" problem!

    3) Lack of marketing efforts (presumably due to lack of marketing budget).

    Suzuki is unknown, invisible to the vast majority of car buyers. Among buyers who realize that they exist, they are seen as "low-rent", not unlike the image KIA had less than a decade ago! The Forenza/Reno (re-badged Daewoo models) served to perpetuate the poor brand image.

    Normally, I wouldn't care about a company in this kind of situation (Mitsubishi, for example, can die tomorrow and I won't give it a moment of thought). But the tragedy is that Suzuki has two DAMN GOOD models that deserve serious consideration- the SX4 is very good and KIZASHI is even better! The Kizashi reminds me a lot of the Mazda6, one of the best cars in its class, but one Mazda6 is sold for every 13 Camrys and 12 Accords?!?!

    When Saturn shut down and their dealers closed, I was hoping that Mazda (and Suzuki) would take advantage of the situation! Hundreds of cleanly designed, well-maintained buildings in good locations just waiting for to be snatched up at dirt cheap prices! Missed opportunity, BIG TIME!
  • iluvmysephia1iluvmysephia1 Posts: 5,713
    edited May 2011
    Normally, I wouldn't care about a company in this kind of situation (Mitsubishi, for example, can die tomorrow and I won't give it a moment of thought). But the tragedy is that Suzuki has two DAMN GOOD models that deserve serious consideration- the SX4 is very good and KIZASHI is even better! The Kizashi reminds me a lot of the Mazda6, one of the best cars in its class, but one Mazda6 is sold for every 13 Camrys and 12 Accords?!?!

    I own a 2008 Mitsubishi Lancer GTS and I absolutely love the car. I would buy another Mitsubishi for my next rig. I also like Kia, I've owned two of them, a 1999 Kia Sephia (very good rig) and a 2001 Kia Sportage 4X4 (very good SUV). I would buy another Kia and I am getting really hot and bothered by the 2012 Kia Rio hatchback. That's just my point...people in the U.S. are so enamored by ugly huge pick-em-up trucks that they don't have a clue about passenger rigs in this nation.

    Not a clue...I test drove a 2010 Suzuki Kizashi and it was a great rig. I went in to negotiations to buy it and the dealership wouldn't haggle a wiggle. I punted and walked away with my beautiful 2008 Mitsubishi Lancer GTS. But the '10 Kizashi I wanted to trade for would've been a great car, too, midsize but a "small" midsize, 6-speed manual tranny and a great handling car as well.

    I took one for a spin at that Henderson, NV, Suzuki dealer, only 8 miles from the Las Vegas strip. Great car, it took the bumps on the road and squish-snipped them down into submission. Good steering feel...I may buy a Suzuki Kizashi Sport with a 6-speed shifter one day. There's more than just a good chance that I will. Loved the car.

    That's what I'm talking about, feel the feeling, test-drive away and enjoy how good cars are these days! We are truly living in the best car manufacturing days of all time. And the Suzuki Kizashi is not just a great car it's also a great value.

    Man, since I've moved to the northern Idaho panhandle, Kellogg to be exact, home of Dave Smith Motors, the world's largest Chrysler dealer and the Pacific NW's largest GM dealer, I've lost track of where the nearest Suzuki dealer even is ta me. Now that you've grabbed my attention I'll Google it, probably in Spokane. Spokane, WA, is only 60 miles west of us here in Kellogg, ID.

    Thanks for reinvigorating my love for the Suzuki Kizashi. I am reigniting plans to get one but it won't be for 2 more years. Our '08 Mitsubishi Lancer GTS only has 70,923 miles on it. Twouldn't be the right time to buy a new rig-if only because we don't need a new rig and I love our Lancer GTS. Leno garage? Should be, dudes.

    It is time for a 6,000 mile oil change next weekend, too. Oh, you haven't heard? Ya don't need to change yer earl every 3,000 miles any more. Edmunds.com said every 6,000 miles is fine and I happen to believe them to a tee. Rock on.

    image
    2011 Suzuki Kizashi Sport...it is really that good...don't believe me?
    Take one for a test drive...don't be a wimp

    2011 Kia Soul Sport 5-speed

  • nippononlynippononly SF Bay AreaPosts: 12,693
    I may buy a Suzuki Kizashi Sport with a 6-speed shifter one day

    No you won't, because....

    I am reigniting plans to get one but it won't be for 2 more years

    They won't be around any more in the 2-3 years it is going to take you to get to buying one. As others have said, Suzuki makes darn fine cars when it isn't busy selling its soul for market share by selling POC rebadged Daewoos, and it will be a shame to see them go.

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

  • essy768essy768 Posts: 1
    Can somebody tell me what they think will happen to people who have a lease on a Suzuki Kizashi should Suzuki exit the US market? Would their warranties be honored by another company? I am considering a Kizashi lease since the pricing is very attractive? Also, does anyone know if leases are done through a finance arm of Suzuki?
  • iluvmysephia1iluvmysephia1 Posts: 5,713
    edited May 2011
    this issue won't be an issue 'cause Suzuki isn't going to leave the U.S. marketplace. Neither is Mitsubishi. So ask at a Suzuki dealership that very same question or Google the question and look up websites that could help you online. You could go to SuzukiUSA's website and look for a contact telephone number or contact e-mail address.

    But I seriously doubt Mitsubishi or Suzuki will be leaving the U.S. marketplace. Seriously forget that.

    2011 Kia Soul Sport 5-speed

  • nippononlynippononly SF Bay AreaPosts: 12,693
    LOL! iluv, let Suzuki go! They aren't going to make it in the States! :-P

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

  • iluvmysephia1iluvmysephia1 Posts: 5,713
    edited May 2011
    makes you so sure. I have insider information that says they will, and it is the following.

    Suzuki does just fine without income from sales in the NA marketplace. Because they are making the bulk of their money from the Asian countries. They have their other endevours, including motorcycle manufacturing and making small cars for the people of India.

    Look for them ta stay in the U.S. marketplace for a long, long time.

    2011 Kia Soul Sport 5-speed

  • joeyrabjoeyrab Posts: 65
    Funny, I was wondering about this myself, that is good to hear....I'd like the SX4 to be in my next choices for a new car....hek, I haven't bought a new car in a long time and the SX4 has been on my list for years now. It deserves a shot for at least a look and test drive..
  • igozoomzoomigozoomzoom Waleska, GeorgiaPosts: 797
    "Can somebody tell me what they think will happen to people who have a lease on a Suzuki Kizashi should Suzuki exit the US market? Would their warranties be honored by another company? I am considering a Kizashi lease since the pricing is very attractive? Also, does anyone know if leases are done through a finance arm of Suzuki?"

    In the past, when other makes have pulled out of the U.S. market (Peugeot, Daihatsu, Alfa Romeo), they have made provisions for warranty repairs, service and parts of existing vehicles. Typically, they would leave a specific number of dealers operating as service/parts-only outlets. In the case of Suzuki, it might fall to VW dealerships.

    Lease specials are offered by American Suzuki Financial Services Company, so they do provide lease offers for the dealers.
  • iluvmysephia1iluvmysephia1 Posts: 5,713
    image
    This 2011 Suzuki Kizashi Sport is though

    2011 Kia Soul Sport 5-speed

  • joeyrabjoeyrab Posts: 65
    I still don't think Suzuki is going to bail on the US market....althought the name "Kazashi" is cool, is may be too "Asian" for some American tastes....not me though....I think the car is great...
  • slhtulsa1slhtulsa1 Posts: 1
    "It is time for a 6,000 mile oil change next weekend, too. Oh, you haven't heard? Ya don't need to change yer earl every 3,000 miles any more. Edmunds.com said every 6,000 miles is fine and I happen to believe them to a tee. Rock on. "

    I would go with what your manufactuer says before edmunds. Edmunds doesn't provide the warranty for your car.
  • steverstever Viva Las CrucesPosts: 41,884
    edited June 2011
    Take a look at the Edmunds Car Maintenance Guide and the maintenance guide in your owner's manual. Be real surprised if they are any different.

    And the normal service oil change interval for an '08 Lancer GTS is 7,500 miles. :-) You want to double-check that for me Iluv? (irritating that Mitsubishi doesn't put free owner's manuals online to download like almost every other manufacturer does. Well, Suzuki doesn't either. :sick: ).

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  • iluvmysephia1iluvmysephia1 Posts: 5,713
    And the normal service oil change interval for an '08 Lancer GTS is 7,500 miles. You want to double-check that for me Iluv? (irritating that Mitsubishi doesn't put free owner's manuals online to download like almost every other manufacturer does. Well, Suzuki doesn't either. ).

    And I love Mitsubishi and I wouldn't say I love Suzuki but I do like them. Oh well, they do give us manuals when we buy cars from them. ;)

    2011 Kia Soul Sport 5-speed

  • steverstever Viva Las CrucesPosts: 41,884
    edited June 2011
    I like to read 'em before I buy them. You can find interesting tidbits in them. Like, while it's not a deal killer, those short 5,000 mile oil change intervals (like on Toyotas) give me pause. Honda is up to 10,000 miles (where most everyone else should be).

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  • iluvmysephia1iluvmysephia1 Posts: 5,713
    edited June 2011
    Honda is up to 10,000 miles (where most everyone else should be).

    Bingo. Right now it's been about 6,400 miles since last earl change and I'm gonna wait this one out until around 7,500 miles this time, like Mitsubishi warrants doing it to keep our 10 year and 100,000 mile Warranty's alive and well and kicking.

    I'm not kidding. Well, maybe just a little. I'm...not. :blush:

    2011 Kia Soul Sport 5-speed

  • steverstever Viva Las CrucesPosts: 41,884
    "A troubled partnership of Volkswagen AG and Suzuki Motor Corp. appeared on the verge of collapse after the German company said its Japanese partner violated their agreement by agreeing to buy diesel engines from another car maker."

    VW-Suzuki Partnership Nears Collapse (WSJ)

    I don't even remember their being a partnership.

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

  • fezofezo Posts: 9,439
    Me neither.

    Dismal.
  • iluvmysephia1iluvmysephia1 Posts: 5,713
    edited September 2011
    were going to collaborate on small cars and/or all-electrics. I did read of this partnership (it hasn't been for very long, AFAIK) but always questioned it. I questioned it because they're very peculiar bedfellows, one a smaller Japanese automaker much more known for their motorcycles and marine products, and the other a large German automaker, one that is fairly financially secure and actually shooting for #1 in the world automaker by the year 2018. It just always seemed to me to be an odd-man out relationship for Suzuki and one that they would be taken advantage of in.

    I am glad to see this one dissolve, the automaker I actually admire the most out of these two is definitely Suzuki, mostly because of their midsize Kizashi sedan. Unless VW builds the 2014 Bulli minibus revival story I don't see anything on their current or future production lines that I am even remotely interested in. The Suzuki Kizashi, OTOH, I have actually test-driven and went in to negotiations to buy one. Those negotiations went sour and, looking back, I'm glad they did. But the Kizashi remains a midsize favorite of mine and one that one day I may look in to once again for purchase, I like the car so much.

    2011 Kia Soul Sport 5-speed

  • I read some time ago, vokswagon wanted to have Suzuki build small cars for them on certain overseas markets...........anyway, I am not a VW fan, and nothing has come from the merger thus far that I have seen, so maybe a split will happen between the two. I like Suzuki automobiles. I like thier engines, and think the SX4 is a neat looking car. I wish Suzuki would pump the money into advertising and really getting their name ot there. If those people at Kia can do it, Suzuki can do it as well.
  • Suzuki is not sinking financially, as the word sort of loosely flows from Edmunds' readers lips, and fingers. They alone are the Japanese kei-car-Kings. And they do build a mean small car. Kia has Peter Schreyer from Audi as their design King, and so they will because of that relationship continue to sell more and more cars and SUV's. Kia is improving so fast now that it makes my car nut head spin so fast I feel like I'm ducking from a Randy Johnson fastball.

    Still, Suzuki is alive and well, but, you're right, in the USA they need to really step it up. Their lack of advertising has made them look bush-league to people here, and I know that that's not a correct image of their cars. The 2010 Suzuki Kizashi I test drove was a bonafide all-star to look at and to drive.

    2011 Kia Soul Sport 5-speed

  • steverstever Viva Las CrucesPosts: 41,884
    "A year after VW’s investment (Suzuki at the same time spent $1.1 billion to buy 2.5 percent of Volkswagen), Ferdinand Piech, chairman of VW’s management board, expressed displeasure that little of tangible value had yet come of the relationship. Tense words about the alliance came from both parties.

    By this summer, the companies’ differences were expressed by Suzuki president Osamu Suzuki, who publicly bristled when VW management implied it could impose its will on the automaker. The 80-year-old Suzuki also wrote a blog that said in no uncertain terms his company had no intention in becoming subservient to VW."

    Suzuki As Independent As Ever, VW Discovering (AutoObserver)

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  • joeyrabjoeyrab Posts: 65
    Good for them, screw VW, I never liked one automobile they produced.
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