Suzuki: Business as Usual for Powersports Ops

November 20, 2012
By Guido Ebert
Suzuki Logo

American Suzuki Motor Corporation (ASMC), a subsidiary of Japan’s Suzuki Motor Corporation (SMC) on Nov. 5 commenced a business reorganization under Chapter 11 of the U.S. Bankruptcy Code, ending automobile sales in the United States and vowing to devote all efforts to its motorcycle, ATV and marine business.

Six days after the announcement, on Nov. 11, ASMC hosted nearly 1000 Suzuki motorcycle and ATV dealer representatives at Las Vegas for the company’s annual business meeting – an event that had been scheduled months in advance.

Understandably, due to the timing of the meeting in relation to the Chapter 11 filing, dealers in attendance were abuzz about the topic.

“It was a difficult but necessary decision – and, when all is said and done, Suzuki dealers will become stronger,” ASMC Senior Director of Motorcycle/ATV/Marine Operations Larry Vandiver announced to the assembled crowd, dismissing any notion that the move would negatively impact the businesses that powersports dealers worked hard to build. “The judge has approved every motion we have made, and so far everything is going as planned.

“We want to ensure the continued expansion of sales of Suzuki brand motorcycles, ATV and marine products in the United States, and so the last thing we would want to do is harm the brand.”

Vandiver was quick to point out that both GE Capital and Sheffield Financial have agreed to continue to support Suzuki’s dealer network, with GE offering dealers floor plan financing and Sheffield offering consumers retail finance opportunities.

Blake Young at Suzuki Las Vegas.
AMA star Blake Young speaking with Rod Lopusnak at the annual Suzuki business meeting in Las Vegas.

And, on the competition front, ASMC leadership also vowed to continue its strong presence as a sponsor of teams in Supercross, outdoor motocross and road racing, and heralded Blake Young, James Stewart, Elena Myers, Ricky Carmichael and a host of other racers in attendance to promote the fact.

Building on the momentum offered by the appearance of the racers, Rod Lopusnak, National Sales Manager – Motorcycle/ATV, announced that ASMC’s powersports business had achieved 12% sales growth in 2012 and would be targeting 15% growth in 2013 (Suzuki’s 50th year in the U.S.).

“To have a healthy brand, you must have exciting products,” Lopusnak told dealers from on stage before revealing the company’s plan to offer 47 motorcycles, scooters and ATVs for the 2013 model year (up from 40 products in 2012 and 28 products in 2011).

“We’re starting a new company, in a way,” Vandiver explained during a press conference the evening prior to the dealer meeting. “Other companies – Chrysler, General Motors – have done it, and so can we. We’re going to get back to our roots, when it was just a motorcycle company.”

Ultimately, it appears powersports retailers believe the business move to be in the best interest of all parties involved. One dealer, who asked not to be named, said his Suzuki sales “aren’t pretty” but conceded that ASMC’s decision was sensible.

“Smart businesses cut the fat and concentrate on what they do best,” he said. “This is really going to streamline their operations here. So, if they remain true to their word and dedicated to bringing us innovative new product the market wants, I think it’ll all work out fine.

“Most people equate the Suzuki name with motorcycles anyway, don’t you think?”

Ricky Carmichael and Carey Hart Suzuki Las Vegas.
Ricky Carmichael (center) and Carey Hart (right) were also in attendance to help bolster enthusiasm for ASMC’s plans to continue sponsorship in major motorcycle race series.


Suzuki has a 49-year history in the United States. U.S. Suzuki Motor Corp., a direct sales subsidiary of the parent company in Japan, opened in Los Angeles on Aug. 16, 1963 and by 1964 was retailing seven models of motorcycle.

American Suzuki Motor Corp., located in Brea, California, was formed in 1986 by the merger of U.S. Suzuki Motor Corp and Suzuki of America Automotive Corp (launched a year earlier with the introduction of the Samurai 4×4).


ASMC posted a loss of -$78.9 million on sales of $751 million in the 2010 fiscal year, and a loss of -$15.8 million on sales of $952.6 million in 2011.

The company sold 101,884 automobiles in the U.S. in 2007, but just 26,619 vehicles in 2011. Auto sales for the first 10 months of 2012 totaled 21,888 units.

Automotive industry analysts suggest Suzuki initially was hurt by its reliance on customers with poor credit (those who were among the first to leave the market when credit dried up in 2008).

Suzuki says it was impacted by economic conditions, including a strong yen that made the vehicles more expensive at retail here in the U.S.; a line-up primarily made of small cars; high costs due to U.S. regulatory requirements; and related market trends. Of course, it wouldn’t be a stretch to surmise that a growing competitor market share in the small car market had a major impact.

Whatever the case, court documents show nearly 150 of ASMC’s 216 auto dealers sold fewer than five cars a month, and analysts estimate there to be up to 4000 vehicles on lots throughout the country.

Suzuki Team Las Vegas 2012.
ASMC will try to keep legal proceedings to a minimum as they phase out automobile sales in the United States.


ASMC’s bankruptcy filing listed debts of $346 million and assets of $233 million as of Sept. 30. The filing also lists more than 1000 creditors.

SMC says it will support ASMC in its restructuring to ensure that ASMC can wind down its automobile marketing business smoothly.

Court records show ASMC will try to avoid a drawn out legal process with its 216 dealers by offering cash payments if they voluntarily scrap their franchise agreements. Dealers who agree to end their contracts by Nov. 30 will be paid half of what they’re owed by ASMC within 10 days and could later attempt to collect the rest of what they are owed through the bankruptcy process.

U.S. Bankruptcy Judge Scott C. Clarkson of the federal court in Santa Ana, California, quickly gave ASMC the authority to borrow an initial $45 million from SMC, which agreed to loan the money at a below-market interest rate of 3% above the common London Interbank Offered Rate (Libor). Of that amount, $30 million will be used for inventory loans and up to $15 million are for advances.

It is likely ASMC will return to court to seek approval for a further major loan from SMC.


Three days after the ASMC announcement in the U.S., on Nov. 8, SMC confirmed it also intended to cease motorcycle production activities at Suzuki Motor España, S.A. in Gijon, Spain, by the end of the first quarter of 2013.

“The decision was ultimately made due to accumulated losses created by the reduction and general condition of the economy in Europe at present,” Suzuki revealed in a prepared statement.

Spainish Suzuki Factory.
Suzuki Motor Espana will cease motorcycle production by the end of the first quarter of 2013.

Suzuki starting building two-wheelers in Spain in 1983, and most recently built bikes like the GZ 125, Maurader 250, Burgman 125, Burgman 200, UX 125, 150 Sixteen, DR 125 SM, GS500 and GS500F for various markets.

Suzuki had no comment regarding which manufacturing plant will take over the production of the models, but stated “some alternative models built at Suzuki’s Asian country production plants will be considered for the European market.”

Suzuki Motor España was formed in 1988 following SMC’s complete purchase of a manufacturing plant from majority shareholder Steyr-Daimler-Puch. The company currently employs 200 workers and will continue to serve as an importer and distributor.

Spain’s economy began deteriorating with the Great Recession in 2008, and in October the country’s unemployment rate reached 25.2%.


SMC supplies 147 distributors in 201 countries.

SMC net sales for its fiscal year ended March 31, 2012, totaled ¥2.6 trillion ($34.2 billion), up 3.5% compared to the previous year. Net income totaled ¥70.0 billion ($921.1 million), up 29.9%.

In the motorcycle business, although wholesales in North America increased, global sales decreased by 1.1% year-on-year to ¥254.8 billion ($3.4 billion).

Automobile business sales decreased by 4.0% year-on-year to ¥2.21 trillion ($29.5 billion), largely due to production disruptions in India and sales decreases in Europe and North America.

Sales of the marine and power products, etc. business was nearly at the same level as the previous fiscal year, at ¥48.4 billion ($645.3 million).