American Suzuki restructures under Chapter 11; exiting auto market in US
American Suzuki Motor Corporation (ASMC), the sole distributor in the continental United States of Suzuki Motor Corporation automobiles, motorcycles, all-terrain vehicles and marine outboard engines, will restructure under chapter 11. The company plans to wind down and discontinue new automobile sales in the continental US. The case will be filed in the United States Bankruptcy Court, Central District of California in Santa Ana.
ASMC determined that its automotive division was facing a number of serious challenges, including 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 US and the disproportionally high and increasing costs associated with stringent state and federal regulatory requirements unique to the US market.
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.
The realignment is intended to better position ASMC for long-term success and is a return to the company?s roots in the US market, which began with motorcycles and has grown to include ATV and marine products. The company will continue to bring the 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 to market. 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.
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.
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.
Source: http://www.greencarcongress.com/2012/11/asmc-20121106.html
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