213 of 219 American Suzuki dealers cease new car sales after cash settlement
American Suzuki dealers are out of the new car sales business. (Photo Credit: Public Domain/Alpha Quadrant/Wikipedia)
As the bankruptcy proceedings for Suzuki Motor Corporation’s U.S. contingent comes into sharper focus, news involving a winding down of new vehicle sales has become clear. Automotive News reports that 213 of American Suzuki’s 219 U.S. auto dealerships have committed to winding down sales of new cars, in exchange for cash and maintenance-only contracts, according to a press release issued by the automaker on Monday.
Suzuki filed for Chapter 11 on Nov. 5
On Nov. 5, American Suzuki filed for Chapter 11 and announced that U.S. auto sales would be superseded by motorcycle and boat engine sales. Dealers have asked to give up their franchise agreements so that their businesses can be converted into Suzuki parts and service centers that can do warranty work. An unspecified cash settlement for each dealership is also part of the deal. Restructuring officer Freddie Reiss noted that the 213 American Suzuki dealers now have agreements in place that will cover over 98 percent of the automaker’s new car sales volume.
“We greatly value our relationship with our customers, and it is very important to us that they continue to receive the necessary support from ASMC during and after our restructuring,” Reiss said in a written statement. “As these agreements demonstrate, we are working within our current U.S. automotive dealer network to help structure a smooth transition from new automobile sales to exclusively parts and service operations.”
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Bonus for accepting Suzuki buyout by Nov. 30
Those American Suzuki dealers who accepted the parent company’s bankruptcy-motivated buyout deal by Nov. 30 were rewarded with half the offered cash settlement within 10 days of deal acceptance. These dealers have already been assured that the full sum of the buyout will be delivered upon completion of Suzuki’s bankruptcy case.
Currently, nearly all remaining Suzuki vehicles in stock in the U.S. are being sold off, which has increased sales figures. In November, American Suzuki dealers sold 2,224 vehicles, a 22 percent increase from Nov. 2011. The gain was also the second-largest month-to-month bump in 2012. Overall annual sales of Suzuki – 23,412 vehicles – were down 3 percent through November when compared with last year.
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