Japan’s Suzuki Motor Corp will pull the plug on its unprofitable auto sales business in the US after nearly three decades, hurt by a strong yen and a limited choice of vehicles that failed to excite consumers.
Suzuki said on Tuesday it would use a Chapter 11 bankruptcy filing by its US subsidiary in federal court in California to shut down the auto business and to focus instead on sales of motorcycles, all-terrain vehicles (ATV) and boats.
The departure of Suzuki ends a 27-year effort to gain traction in the world’s second-largest auto market and should most benefit Kia Motor and Nissan Motor, the two top competitors.The bankruptcy could allow Suzuki to step away from its contractual responsibilities to its over 200 dealers.
Suzuki models did not catch on in the US, and the company suffered from a lack of investment in new vehicles. It also struggled from the strong yen that makes it more expensive to export products from Japan.It sold 21,188 vehicles in the US through October this year, a 5% drop from the previous year.
American Suzuki Motor Corp will file for bankruptcy with $346 million in debt, of which $173 million is owed to Suzuki group companies, the company said.The Japanese parent company plans to buy the motorcycle, ATV and outboard engine operations out of bankruptcy. The new US unit plans to keep the American Suzuki name, the company said.