Saturday, November 10, 2012
@Brandchannelhub #Suzuki Joins Joe Isuzu on One-Way Flight Back to Japan
Don't cry for Suzuki. The company's exit from the U.S. market simply eliminates its exposure to one of the world's most competitive markets for automakers, where Suzuki has been beating its bumper against a wall, and allows the Japanese company to focus on domestic and emerging markets where it's doing quite well, thank you.
In fact, the brand won't entirely disappear in America, Bloomberg notes: "Suzuki will stop the sale of new automobiles in the U.S., though it will continue offering motorcycles, all-terrain vehicles and boat motors."
Suzuki Auto entered the U.S. market in 1985 with its Samurai subcompact SUV, which was a big hit out of the gate. But soon the vehicle got a reputation for rolling over, after an investigation by Consumer Reports, and sales swooned.
Over the next several years, the company never really regained its footing for a variety of reasons as it tried to stir interest in a line of vehicles that includes the "spirited four-door SX4 Sport, bold and functional five-door SX4 AWD Crossover, refined Grand Vitara compact SUV, award-winning Equator pickup truck and 2012 Kizashi and SX4 SportBack."
Its high-water mark in the U.S. was about 100,000 sales a year in 2006 and 2007. And its Kizashi sedan, introduced a few years ago, was only a last hope. Through October, Suzuki sold only 21,000 vehicles in the U.S., a 5-percent drop over the same period last year in a market that has grown by 14 percent.
Its Japanese parent "determined that its automotive division was facing a number of serious challenges," American Suzuki said in a statement (the U.S. distribution arm of Suzuki filed for bankruptcy protection as part of the reorganization). "These challenges include low sales volumes, a limited number of models in its lineup, unfavorable foreign-exchange rates, the high costs associated with growing and maintaining an automotive-distribution system in the continental U.S. and the dispropportionally high and increasing cost associated with stringent state and federal regulatory requirements unique to the U.S. market."
Suzuki was also hampered by the intensifying competition in small cars, including really small cars, offered not only by traditional Japanese and Korean rivals but also increasingly by Detroit's Big Three and Volkswagen.
With Suzuki joining Saab and Isuzu (remember Joe?) in beating a hasty retreat from the U.S. auto market, some analysts believe that struggling Mitsubishi could be the next second-tier Japanese manufacturer of small cars to book a one-way ticket home. With Suzuki gone, Mitsubishi will have the fewest sales of any automaker in America, but Mitsubishi President Osamu Masuko told Automotive News that his company has "no intention whatsoever of withdrawing from the U.S. market."
In the meantime, Suzuki's exit will free the company to focus on emerging markets such as India, where it is doing well, and its long presence in its home Japanese market with kei — really small cars that enjoy preferential tax treatment.
So for Suzuki, less of America could mean more in the rest of the world.
Below, Suzuki's final U.S. TV commercials, for the 2013 Grand Vitara and SX4: