Brea, Calif. -- American Suzuki Motor Corporation (ASMC or
the Company), the sole distributor in the continental United States of Suzuki
Motor Corporation (SMC) automobiles, motorcycles, all-terrain vehicles and
marine outboard engines, today announced that it plans to realign its business
to focus on the long-term growth of its Motorcycles/ATV and Marine divisions.
Following a thorough review of its current position and
future opportunities in the U.S.
automotive market, ASMC will wind down and discontinue new automobile sales in
the continental U.S.
The company has determined the best path to achieve this realignment in an
efficient and orderly manner is to restructure its operations under Chapter 11.
The case will be filed in the United States Bankruptcy Court, Central District
of California in Santa Ana.
Consistent with ASMC's long history of standing by its products, owners of
Suzuki automobiles will be protected. All warranties will continue to be fully
honored and automobile parts and service will be provided to consumers without
interruption through ASMC's parts and service dealer network.
ASMC remains firmly committed to Motorcycles/ATV and Marine products and these
divisions are competitively positioned in their respective markets, allowing
for long-term growth as economic conditions improve.
The realignment is intended to better position ASMC for
long-term success and is a return to the company's roots in the U.S. market,
which began with motorcycles and has grown to include ATV and marine products.
ASMC remains very proud of its high quality, high performance motorcycle, ATV
and Marine products.
The company will continue to bring ASMC products to market,
including its full lineup of sportbike, cruiser, touring, scooter, dualsport,
motocross, off-road motorcycles and KingQuad ATV line, as well as its flagship
DF300AP, state-of-the-art DF20A, and DF15A, among other models.
Additionally, ASMC is working to further build its market
share through continued investment in additional support for dealers through
marketing and advertising activities and sales promotion. Suzuki will continue
to have a strong presence as a sponsor of teams in supercross, outdoor
motocross and road racing.
In evaluating its position in the highly regulated and competitive U.S. automotive
industry, ASMC determined that its automotive division was facing a number of
serious challenges. These challenges include low sales volumes, a limited
number of models in its line-up, unfavorable foreign exchange rates, the high
costs associated with growing and maintaining an automotive distribution system
in the continental U.S. and
the disproportionally high and increasing costs associated with stringent state
and federal regulatory requirements unique to the U.S. market. While the decision to
discontinue new automobile sales in the U.S. was difficult to make, today's
actions were inevitable under these circumstances. ASMC is dedicated to
honoring its commitments to automotive customers through and after the wind
down of new automobile sales in the continental U.S.
An Orderly Process to Serve Consumers
ASMC intends to work within its current U.S. Automotive dealer network to help
structure a smooth transition from new automobile sales to exclusively parts
and service operations, or, in some instances, an orderly wind down of
dealership operations. ASMC intends to market and sell its remaining U.S. automobile
inventory through its automotive dealer network. Through and after the
restructuring, all warranties will be fully honored and automobile parts and
services will be provided to consumers through the dealer network. ASMC intends
to honor any automobile buyback agreements that are currently in place with
financial institutions.
As part of its chapter 11 filings, ASMC will submit a proposed Plan of
Reorganization and Disclosure Statement that specifies how the Motorcycle, ATV
and Marine divisions will be maintained and enhanced, and how its relationship
with automotive dealers will be largely transitioned to support consumers and
dealers through continued parts and service operations. SMC or its nominee
intends to purchase ASMC's Motorcycle, ATV and Marine businesses, as well as
the automotive service operation responsible for parts and warranties, through
a new U.S.
subsidiary that will retain the ASMC brand name.
ASMC believes it has sufficient cash on hand to operate its businesses during
the restructuring. If necessary, ASMC will request permission from the Court to
borrow additional funds from SMC needed during the restructuring.
Honoring Commitments
ASMC intends to operate its Motorcycles/ATV and Marine businesses as usual and
is dedicated to completing the realignment process as smoothly and efficiently
as possible. ASMC will continue to fully stand behind all of its products and
honor all warranties from these divisions. ASMC is working with GE Capital's
Retail Finance and Commercial Distribution Finance businesses to continue
providing motorcycles and ATV consumer financing programs and motorcycle, ATV
and marine dealer inventory financing respectively. The company expects
existing agreements with other dealer and consumer financing providers to
continue as well.
ASMC has filed a series of first day motions requesting approval to continue
paying employee wages and benefits in the ordinary course, offering dealer
incentives and payments under customer warranties. ASMC also expects to pay
vendors in the normal course of business for goods and services delivered on or
after its November 5, 2012 filing. Payments for goods received before ASMC's
November 5, 2012 filing will be made in accordance with the chapter 11
procedure.
SMC, the 100 percent interest holder in ASMC, is not a debtor in the chapter 11
filing.
Additional information regarding ASMC's business realignment can be found at
the company's website, www.suzuki.com, or via an information hotline at (877) 465-4819.
