Suzuki files for bankruptcy in USA

If you own or are planning to buy a Suzuki vehicle in the United States, this is not good news — American Suzuki has filed for bankruptcy and will drive out of the car market in North America. Suzuki motorcycles will continue to be sold, but not cars. According to the New York Times, Suzuki car dealerships will be turned into parts and repair facilities.

What happens to the 2013 Suzuki models now arriving in dealer showrooms is unclear — including the well-regarded Kizashi performance sport sedan, Grand Vitara SUV and Equator truck models.

According to Edmunds.com senior analyst Jessica Caldwell, “No one should be surprised by this announcement, given Suzuki’s lackluster sales performance in recent years. The company has had low margins, low-priced cars, and small volume – which is far from the ideal combination. And unlike with exotic or luxury brands, it’s nearly impossible over the long term to sustain a brand on such little volume when you don’t have a healthy margin.”

So far in 2012, Suzuki has sold just over 21,000 new cars in the U.S., making it the third worst performing non-luxury brand — behind Saab and smart. Saab went out of business recently, too, but Smart is owned by Mercedes-Benz parent company Daimler and a thriving short-term, on-demand rental program called Car2Go in several cities in North America, including Austin, Vancouver and San Diego, and in Europe.

With Suzuki exiting the U.S. market, the race will be on for automakers to grab Suzuki loyalists. Nissan and Kia may have the most to gain. Those are the two brands most often comparison shopped against Suzuki vehicles on the Edmunds website.

The bankruptcy of American Suzuki does not affect the parent company in Japan, which will continue to manufacture cars and trucks for markets worldwide — just not North America.