By on December 7, 2012

Suzuki’s death rattle continues unabated as the company’s American distribution arm will receive $100 million in financing, half of which is earmarked to purchase inventory from parent company Suzuki Motor Corp.

While the funds are partially meant to help Suzuki wind down its U.S. operations, half of it will go towards buying more cars, as a Suzuki press release explains below

In response to continued consumer demand, dealer interest has remained high in continuing to order and receive shipments of Suzuki automobiles as long as they remain available, ASMC intends to use a portion of the DIP funds to purchase and ship 2,500 additional cars from Japan to the continental U.S., which have been manufactured since ASMC announced its restructuring. Earlier this week, the Company released its November 2012 sales numbers, reporting that it sold more than 2200 units last month, an increase of 22% compared to the same period last year.

If you really must have a Kizashi, you’ve got one last chance to do so.

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14 Comments on “Suzuki Death Watch 13: Suzuki Gets $50 Million To Buy More Inventory...”

  • avatar

    Here in Florida they’re offering good, not great, deals on Suzuki’s. I’ve yet to see some of the heavy cuts that popped up at the end of Saturn’s or Pontiac’s run. And they were still being supported by GM. Who’s buying these cars to keep demand up?

  • avatar

    The top 5 mfrs sell over 2500 per day in the US. Ford sells that many vehicles every 10 hours.

    I don’t understand why Suzuki would be so anxious to lose more money by selling deeply discounted cars. They should just go home already.

    • 0 avatar

      You have to think on the margin. Let’s say that Suzuki has $2 billion in fixed costs for a given model and variable costs of $8,000 a car. If a car is sold to the dealer for $10,000, then $2,000 can be applied against fixed costs, which means that the breakeven point is 1 million units. If you only sell 750,000 by the time you replace the model, you will have lost $0.5 billion on the model (250,000 times $2,000), which means that eventually you go out of business. However, if you have already spent the two billion dollars, then offering $1,500 in incentives means you have $500 ($2,000 in variable profit less $1,500 in incentives) left over to apply against fixed costs. That is why a manufacturer will continue selling cars at a loss until it is time to replace the model. And that is what Suzuki is doing.

    • 0 avatar

      “I don’t understand why Suzuki would be so anxious to lose more money by selling deeply discounted cars. They should just go home already.”

      Because American Suzuki Motors Corp. is buying all the leftover U.S.-spec cars that Suzuki Motors (the parent company) still owns. These are the cars that were assembled but not yet distributed out to dealers. Selling these cars at a discount in their home market is the easiest and cheapest way to get rid of them.

      • 0 avatar

        +1 on above.
        These US spec cars are already built, or being built out of parts on hand.
        They can’t be sold in Japan so they’ll go to dealers in US that haven’t already taken down the “Suzuki” sign

      • 0 avatar

        Yours and Ron’s responses make sense – thanks. I suspect that the math will end up very much in the red as the discounts get deeper, but Suzuki has little choice but to dump the remainder of its US-spec cars.

  • avatar

    I saw a Kizashi the other day. First, only and probably last one I will ever see. It’s a shame they didn’t make it in the US, their cars had many good points but the market was bad, the competition pretty tough, and in the end they didn’t have the network to support them.
    The SX4 was a good car despite being the “crappy” car on Top Gear everyone drove around the track. If it got better gas mileage it would have been in my driveway.

  • avatar

    I feel like I’ve seen more Suzukis (and Mitsubishi Outlanders for some reason) in the last few weeks/months than I had in the previous several years. Discounting?

  • avatar

    One of the SCCA instructors here runs a Kizashi. I went on a ride with him at a PDX event. That experience gave the car instant street cred with me.

    I think the Kizashi is nice, I just wish the S on the grill was smaller. I think it looks cheap (and I love mySuzuki V-Strom).

  • avatar

    Didn’t the last Suzuki Death Watch say there were only six Suzuki dealerships that weren’t taking the buyout? Does that mean that only six dealers are going to have to sell all 2,500 of those US-spec cars (415 per dealer)?

    That’s a lot of orphan Suzukis to try and unload per dealer.

  • avatar
    Land Ark

    Argh! I just bought a GTO a few months ago so adding another payment isn’t something I would want to do. But the draw of a cheap Kizashi is so hard to ignore.
    I test drove one back in late 2008, right when they started hitting dealers. It should have been a sign when the first dealer I went to had them listed on their web site but when I got there the manager on duty said he didn’t think they were being delivered to any dealers for another 2 months. A dealer 20 miles away had 4 in stock.

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