Suzuki Motor Corporation is slashing its marketing budget in light of diminished sales and a shrinking number of Suzuki dealers. Automotive News reports that despite a 13 percent increase in sales across the global automotive industry through the first quarter of 2012, Suzuki dropped 2 percent to just 6,561 sales.
Suzuki opts out
Suzuki has made major changes of late to the way in which the brand is marketed. The Japanese automaker skipped both the Detroit and Los Angeles auto shows this year, and within the past two months, it has also suspended all social media activity on Twitter and Facebook. No national television commercials for the brand have aired since 2009. Top product planning and marketing executive Steve Younan left Suzuki in January, and the company has no immediate plans to find a replacement.
Another sign of trouble for Suzuki came in January, when the automaker stopped receiving customer satisfaction reports from J.D. Power and Associates. Automakers use the data compiled by J.D. Power to track dealer performance. A memorandum from Suzuki indicated that the automaker will seek a different vendor to provide this data, notes Automotive News. The position has reportedly not been filled yet.
Shrinking Suzuki dealer ranks
In 2011, American Suzuki dropped 32 dealer franchises from its roster, approximately 12 percent of its U.S. total. The number of Suzuki dealers has continued to drop each year since 2005, note various sources.
“Suzuki Motor Corporation’s strategy has become very much focused on short-term profitability,” said a source with knowledge of the decision process involving Suzuki’s marketing cuts. “They’re limiting their future in the U.S.”
While American Suzuki continues to slash programs, Suzuki dealers feel the financial pain.
“At one point I really thought they were going to support it, but it was kind of like a downward spiral — no sales, no money, no advertising,” said former Suzuki dealer Bill Kay.
The silver lining
Kay, who currently owns Ford, Chevrolet, Buick-GMC, Honda and Nissan dealerships west of Chicago, blamed Suzuki’s sales troubles on poor consumer awareness.
“The problem is that, while it’s not a bad product, it’s not on anybody’s radar to look at,” Kay said.
James Morrell, owner of Advantage Suzuki in Albany, N.Y., and chairman of the Suzuki Dealer Advisory Board, points out that from a large corporate standpoint, slashing the number of U.S. dealerships actually had a silver lining.
“Suzuki didn’t lose any volume, because (those) dealers weren’t selling any new cars,” Morrell said.