By on November 8, 2012
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American Suzuki has received court approval to borrow $45 million to help restructure their dealer network following a Chapter 11 filing.

Dealers will be offered cash payments within 10 days if they agree to scrap their franchise agreements.

Bloomberg has their own quick and dirty explanation

“Should dealers agree to end their contracts by Nov. 30, Suzuki Motor would pay them half of what they’re owed by the distributor within 10 days, according to court documents.

The dealers could later attempt to collect the rest of what they are owed through the bankruptcy process.

The company may owe dealers about $50 million…”

Dealer franchise laws vary by state and offer dealers a fair amount from protection from attempts to shut them down by the manufacturers. But Suzuki is hoping the payouts will provide a clean break for their dealers. And with nearly 70 percent of them selling less than 5 cars a month, it would be hard for them not to take the money and run. There are also 4,000 or so unsold Suzuki cars that dealers can legally return to the manufacturer – so if you’re really hankering for an SX4, act now.

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13 Comments on “Suzuki Death Watch 9: American Suzuki To Get $45 Million Loan For Restructuring Dealer Network...”


  • avatar
    FreedMike

    That horse looks suspiciously like the one at the entrance to Denver International Airport.

  • avatar
    mr_muttonchops

    I’m not sure if they need to “restructure” their dealership networks so much as they need to HAVE a dealership network in the first place. The closest Suzuki dealership is like 50 miles from me. I can find a Maserati easier than I can find a Suzuki.

  • avatar
    Pch101

    “There are also 4,000 or so unsold Suzuki cars that dealers can legally return to the manufacturer”

    This really didn’t sound accurate to me. Dealers typically buy their inventory from the manufacturer.

    But then I saw this article in Automotive News: http://www.autonews.com/article/20110321/RETAIL07/303219964 Apparently, Suzuki doesn’t have a captive financing arm.

    Perhaps they had some oddball arrangement, such as the dealer taking the inventory on some sort of consignment basis, which would make the dealers part of the creditor pool.

    • 0 avatar
      Pig_Iron

      Any remainders could be “Canadianized” and quietly unloaded in Ontario and BC. That might allow for a break-even scenario.

      • 0 avatar
        28-Cars-Later

        Can US spec cars just be ‘Canadianized’? Sure safety/design specs are probably similar but whats about all of the wonderful emissions and other compliance rules?

      • 0 avatar
        Pch101

        Canadian rules are modeled on US regulations. The cars probably already have most of the things that the Canadians require, such as bilingual advisories on the visors. Swapping out the speedometer and odometer for metric gauges may be all that is required.

        I don’t know whether they would export the cars to Canada. But I would assume that the cars belong to the distributor, rather than to the dealer (which is unusual), and the distributor is afraid that they won’t get them back if they don’t pay.

  • avatar

    I’m a touch confused – why would someone loan money to Suzuki in order to make payments to dealers meant to shut down the operation?

    Sounds like a sure money loser to me …

    D

  • avatar
    Colinpolyps

    You can park a Kizashi in my driveway if there is going to be about 6 or 7 grand on the hood. There a damn nice car but no one will touch them now at current prices due to a drastic pending depreciation. My son has one and is most happy with it. I have driven it and like the size and handling, well fitted out for the price he bought a used one for last year. This years price will have to be much lower however.

  • avatar
    daveainchina

    too bad too, I like the SX4 and the swift(I know it’s not sold in the USA which is too bad). I think both are excellent cars in their class.

  • avatar
    Piqutchi

    I said it once, and I will say it again: Suzuki and Mitsubishi should really join their automotive businesses together in the US.

  • avatar

    I got a 1997 Metro (aka Swift) 4 door, 5 speed, 4 cylinder, with A/C. 185k. 35-40 MPG on OLD technology. It ain’t a thrill to drive but damn reliable and the cheapest thing to maintain.

  • avatar
    gslippy

    4000 cars left in inventory is about 2 month’s worth at October’s sales pace – not bad, really.


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