Suzuki Death Watch 11: Is Suzuki Canada Really Safe?
Almost as soon as ASMC declared its intentions for Chapter 11 bankruptcy, Suzuki Canada, Inc. sent out the following statement:
“Suzuki’s customers can confidently continue to purchase new vehicles, obtain service, parts and accessories and take full advantage of Suzuki Canada’s warranty program,” said Bill Porter, Senior Vice President, Automobile Sales & Marketing, Suzuki Canada. “Suzuki Canada, including its Automotive Division, remains fully open for business in Canada, and will be honouring all customer commitments.”
“While Suzuki Canada will continue to monitor market conditions in light of the U.S. filing, we have no current plans to change Suzuki Canada’s operations as a result of the events in the U.S.,” Mr. Porter said. “Suzuki Canada remains proud of the upcoming 2013 model year for new automobiles, which will continue uninterrupted as planned”.
While the wording is fairly strong on Suzuki Canada’s intention to stay in the market in the Great White North, it isn’t nearly as strong as Mitsubishi President Osamu Masuko’s statement to Automotive News after the ASMC announcement:
“We have no intention whatsoever of withdrawing from the US market.”
That’s all that needed to be said. No wiggle room. Kill the speculation. However, Suzuki Canada’s statement leaves a lot to be interpreted. Phrases such as “…will continue to monitor market conditions…no current plans to change…” don’t necessarily strike confidence into the buying public.
While the Best and Brightest, including members of TTAC’s editorial staff believe Mitsubishi will be the next brand out the door, a statement such as the one from Mr. Masuko coming from a company’s president is pretty strong. We don’t see Osamu Suzuki making those kinds of statements about Suzuki’s intention to stay in the Canadian market.
Fortunately, we had a chance to speak with Bill Porter Thursday evening of last week to get some clarity on Suzuki’s position in Canada and where they plan to go in light of ASMC’s restructuring.
MS: “What do you think of ASMC’s Chapter 11 filing and how is that going to affect Suzuki Canada?”
BP: “Well, honestly, we don’t know. You know, of course, that’s something we are very interested in as well. I don’t think anyone could predict that or can predict that, let’s put it that way. I think it’s a matter of…and we say this in our press release and we’ve said it to our dealers…for us, business as usual. However, we are going to watch and see what impact this will have on our business. So, that’s something we are very aware of. It’s a new element. Normally you’re watching the competition and you’re watching to see what’s going on in the industry. This is just something else for me to keep an eye on to see what impact this will have on our business.”
MS: “Has Suzuki Motor Corp in Japan said ‘don’t worry’?”
BP: “There’s no change to what we’re doing. We’re doing just the same thing we have been doing all the way along. There’s just been no change to our operation. It is what it is. Just no change at all so just keep doing what you’re doing. We’ve had some pretty successful months and the last five months have been really good. We seem to be on a roll so there is no reason to muck around with that.”
MS: “Many of the same difficulties mentioned in the ASMC restructuring plan are also issues that Suzuki Canada faces.”
BP: “Some of them, yeah.”
MS: “Including the strong yen and a limited model range. How does Suzuki Canada plan to overcome those challenges?”
BP: “Well I think that we already are. This isn’t something that just popped up. This is something that’s been ongoing for a number of years. All of our product, as you may know, comes out of Japan. We’ve been able to deal with that as a company and a Canadian operation effectively and efficiently. We are an efficient little team here – you don’t know us of course – but, we’re a very efficient little engine over here. I’ve been with Suzuki for six years and I must say our business – based on our business model – (the team) is the right size. There’s eight of us, just eight of us, in the automotive division at head office to run the whole thing. So, you know, that’s not very many people running an automotive division. But, we manage and have managed that for the last six years. Other car companies – I came from Hyundai, Kia, Nissan – we had a team of 100 people and I’m not exaggerating. They’re trying to do the same job we’re doing here with eight. It’s a matter of being efficient, being effective, and Suzuki, by the way, not just here, is known for being efficient and effective pretty much all over the world. I don’t know about the American situation. I do know they had a big job trying to service that big market. We just do what we have to do to make it successful.”
MS: “How does Suzuki Canada plan to bring new product to market without being able to leverage sales volume from the US operation?”
BP: “Well, that will be up to our head office to decide. I think that’s something that we said in our press release. SMC, our head office, will monitor the situation and look at plans going forward. Based on this decision by American Suzuki, that’ll be up to them (SMC) to come up with these ideas and plans. The Honda Fit is in Canada – it’s made in China – Honda Canada brings them in but they don’t sell them in the United States. So, it’s not impossible. I’m not saying they are going to do it (manufacture in China) but it’s a possible situation.”
MS: “Will we see Suzuki Canada import products from a country other than Japan, namely Hungary or India where costs are less than in Japan, Canada, or the US?”
BP: “Yeah, I can’t answer that question. I have no idea. We don’t disclose any future product plans. Suzuki doesn’t do that and never will. Even if I did know – I don’t – I couldn’t tell you. At this point in time, I don’t know that.”
MS: “Is Suzuki Canada one-hundred percent committed to the Canadian market? And does Suzuki Canada have the full support of Suzuki Motor Corporation to continue bringing fresh models to market?”
BP: “Well, I can’t answer that question. I don’t know that. I know that, again, looking at our press release – and I have to stick to that because that’s what we have to do here – but, it says Suzuki Canada has no current plans to discontinue new automobile sales in Canada and that Suzuki Canada, including the automotive division, continues fully open for business honouring all customer commitments. I think it’s a matter of what makes business sense. I think given the current development it’s something that will have to be looked at – what makes business sense.”
MS: “So, you cannot comment or confirm that Suzuki Canada is one-hundred percent committed to selling cars in the the Canadian market with the full support of Suzuki Motor Corporation?”
BP: “I can right now. Suzuki Canada has no current plans to discontinue new automobile sales in Canada. I think that is that commitment. But, again, you have to quantify that. Right now, that’s what the bulletin reads. ‘Has no current plans’. That’s our plan right now. Our new models (refreshed Grand Vitara, Kizashi, SX4) are out there. They’re going full speed ahead. I’m focused on that. If a decision is made at some point in time in the future, that’s something we will announce at that time. Right now, we are focused on what we need to do here – keep selling cars. Keep the momentum going, that’s our job. I know where you’re going, and I don’t know the answer to that question. I know what you’re trying to ask me and I understand. I just don’t know the answer to that question. I don’t think anyone knows at this point. This is a huge announcement in the United States and I think it is something we all have to deal with and sort through as we go.”
MS: “What can consumers in the future expect from Suzuki regarding product?”
BP: “Again, obviously I can’t comment on that. By the way, we never have – I want to be clear, Mark – in the case of a lot of Japanese companies, everything’s really close to the vest.”
MS: “Are there any plans to replace the SX4?”
BP: “I can’t answer that question.”
MS: “Will Canada get a vehicle based on the S-Cross concept shown at the Paris Auto Show?”
BP: “No idea. No idea. I can’t answer that question. That was a prototype to get reaction on styling cues.”
MS: “So, do you think that will highlight what the new SX4 is going to look like when it is finally replaced?”
BP: “They didn’t even position it, I don’t believe, as a replacement for the SX4. I believe it was presented as a concept, a new looking car. Looking at the press release, I believe it was positioned as a separate car. I think some of the journalists in Germany picked that up – they tried to position it as a replacement but I don’t believet that’s the way Suzuki Motor Corporation presented it.”
MS: “How does Suzuki plan to differentiate itself from its rivals in the Canadian market?”
BP: “I guess we are right now. The key point is 85% of our vehicles (sold) are all-wheel-drive vehicles. That’s where we seem to shine. Particularly in areas where the climate is ‘not good’ – the province of Quebec where they see lots of snow and ice – we seem to do very well in those markets because of the size of the vehicle, it’s a compact vehicle, and of course it has the advantage of having all-wheel-drive. We only really have one competitor, to be honest with you, and that would be Subaru. That’s great, one competitor when you really think about it, in an automotive market where there’s twenty manufacturers to compete for the business. We’ll continue to focus on that key area of our business. The Grand Vitara and SX4, with the facelifted models and features we put in the cars, we have a distinct advantage now in equipment level over the competition. So, we’ll promote that. We have all of our advertising ready – we’re on television now in the province of Quebec – highlighting those features of the cars.”
MS: “Will we see any national advertising?”
BP: “It’s region by region. We only have 60 dealers in Canada. And, in Canada, there about 250 dealer points. There’s no sense in advertising in markets where they (customers) can’t go to a dealership. What we’ve done is go to the regional level and do more targeted marketing where dealers are and really focus on their markets, that’s the key to success. You can do the ‘shotgun advertising’ from coast to coast, that would be wonderful, but we’re only talking about 60 markets out of 250. There’s no sense in spending money doing that.”
MS: “How has the fact that Suzuki isn’t part of CAMI Automotive anymore hurt Suzuki Canada?”
BP: “Not that much, actually. We manufactured the XL7 there. I’ll be honest with you, we sold some, but that’s a tough segment to compete in. The compact sport utility segment is a very large segment. The intermediate sport utility segment is a much smaller segment and a very difficult segment. You get into some really pricy vehicles where those people that have the $40,000 or $45,000 really make decisions based on brand strength versus just value. so, we were selling some of them, maybe 1000 per year, but that was never going to be a volume car for Suzuki Canada. Just like the new Pathfinder for Nissan, that used to be their best selling car, but as soon as it went up in size and they brought the Rogue in, the Rogue became that car, and the Pathfinder just died.”
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