The Bell Tolls For Suzuki
[Originally posted on November 8, 2012]
On Monday of this week, American Suzuki Motor Corporation announced that not only is the company filing for Chapter 11 bankruptcy protection, but their cars will also no longer will be sold in the United States. For many, the announcement will prompt questions of, “Who is Suzuki,” or “Suzuki still made cars?” For those that know the automotive industry, it is the mercy killing of an animal that has been wounded for years.
Suzuki in the States performed its best in the years preceding the financial meltdown that triggered the recession in 2008. It was in 2008 that Suzuki hit its plateau, selling 107,000 cars by the end of the fiscal year (calendar year 2008 sales are listed at 84,862 from goodcarbadcar.net), and U.S. market share of 0.64%. Suzuki’s slow sales rise ended abruptly in 2009, as the financial crash bore down on the automotive industry with ferocious intensity and decimated Suzuki’s sales, which closed at 38,695 cars for the calendar year. The introduction of the Kizashi, Suzuki’s sporty (and critically well-received) offering in the ruthlessly competitive midsize sedan segment, and a rebadged Nissan Frontier-based truck dubbed the Equator couldn’t help save Suzuki from its freefall throughout 2010. Suzuki closed the calendar year at roughly 1/4 the sales figures it reached just a couple years before.
It is easy to blame the demise of Suzuki’s U.S. car division on the economy, but these factors were far from the only problem. Suzuki spent a pittance on advertising, and all the marketing in the world is nothing without a solid automobile lineup; this was something that Suzuki was never able to pull off. The compact SX4 and its Aerio predecessor were blandly styled, minutely more powerful, and similarly priced to segment leaders like the Toyota Corolla, Honda Civic, and Ford Focus. In retrospect, the timing of the Kizashi’s release was unfortunate, and given a fair shot, it really could have been the sporty alternative to the Nissan Altima and Toyota Camry. The Kizashi is well-equipped, with a standard 185hp 2.4L inline-4, 6-speed manual transmission, available all-wheel drive, and started a hair under $20,000. The Grand Vitara CUV is a weak competitor to the Honda CR-V and Ford Escape. Although it comes standard with RWD, the four-speed automatic transmission and below-average fuel economy allowed the usual suspects to soundly beat it month after month. The aforementioned Equator pickup is a rebadged Nissan Frontier, albeit at a marginally higher price tag.
The Kizashi: it coulda been a contender. From usnews.com
Adding to Suzuki’s brand perception and model lineup woes was the total commitment by two Korean manufacturers to overhaul their own offerings and really hit the American marketplace hard. Kia and Hyundai, long competing in America on price, hired actual designers (who made cars that didn’t look like a mass of clay), installed real engines that made horsepower, and raised the prices of their cars. This move required a lot of balls on Hyundai’s end, and not only did it end up paying off, but every other auto manufacturer came to the realization that they had to step their game up to remain competitive. Suzuki, with its myriad problems, was simply left behind in the shuffle. Without a significant cash infusion and a commitment by corporate to really compete in the marketplace, it was just a matter of time before Suzuki’s automotive division shuttered its doors.
The car division is the only piece of Suzuki’s pie to stop selling products in the U.S. The motorcycle division, headed by its famous halo bike, the Hayabusa, will still be sold, and Suzuki will still sell ATVs and marine engines. Suzuki’s North American headquarters, located just a few miles from me in Brea, CA will likely still stand, although there will be a few less people wandering its halls.