Canadian Manufacturing

American Suzuki Motor files for bankruptcy protection, plans to cease selling cars

Reorganized company will keep name, focus on motorcycles, ATVs and marine engines


BREA, Calif.—American Suzuki Motor Corp. filed for Chapter 11 bankruptcy protection and said it will cease selling automobiles in the U.S. as part of a plan to restructure its business.

The company, based in Brea, Calif., is the sole distributor of Suzuki Motor Co. vehicles in the continental U.S.

In documents filed with the U.S. Bankruptcy Court in the Central District of California, the company estimated that its debts and liabilities range from at least $100-million to as much as $500-million.

It also said it has between 1,000 and 5,000 creditors.

American Suzuki Motor said it has enough cash to operate during the restructuring and intends to honour all car warranties and buyback agreements.

It will work with its car dealerships to help them transition into parts-and-service operations.

In some cases, the dealerships will be shuttered, it said.

Once it exits bankruptcy protection, American Suzuki Motor said it will focus on selling Suzuki motorcycles, all-terrain vehicles and marine outboard engines.

It said that it is exiting the car business because of slow sales, unfavourable foreign exchange rates and high costs due to U.S. regulatory requirements.

It sold 2,023 vehicles in October, which was up five per cent from the same month last year.

Its Grand Vitara sport utility vehicle posted a 64 per cent jump in sales last month, although American Suzuki did not say how many of them were sold.

In May, the last month it provided a breakdown of its sales, it moved 474 Grand Vitaras, while its biggest seller was its SX4 small crossover, of which 1,101 were sold.

The bankruptcy and reorganization are unrelated to its parent Japan-based Suzuki Motor Corp., which intends to buy the American subsidiary’s remaining businesses and automotive service operation.

The reorganized company will retain the American Suzuki Motor name, the company said.