American Suzuki Files for Bankruptcy

11/05/2012 @ 9:44 pm, by Jensen Beeler19 COMMENTS

Certainly wanting to bury the news in the after-work hours, American Suzuki Motor Corporation has just announced that it is filing for Chapter 11 protections, as the American subsidiary of Suzuki Motor Corporation heads into bankruptcy and business restructuring.

Pivoting its business to focus on marine and motorcycle/ATV sales, Suzuki will wind-down and ultimately stop selling cars in the US market. In its press release, Suzuki says will honor all current warranties, and parts and servicing will continue to be available to Suzuki automobile owners.

Today’s news should have little to no immediate affect for Suzuki motorcycle owners in the USA, as the Chapter 11 proceedings are focused more around Suzuki dumping its failed automotive business here in North America, than anything else.

While it remains to be seen how the Japanese company will restructure its American office, the move in fact could be a boon to motorcyclists, as it could mean some life could be pumped back into ASMC. The American Suzuki office has suffered recently from under-staffing and disorganization, and the company could benefit from a proper reorganization.

Time will tell how effective Suzuki’s restructuring will go, and we certainly haven’t heard the full extent of this news item yet. As the ball of yarn untangles, check out the full press release is after the jump. Suzuki’s letter to motorcycle owners is here, car owners here, and there is also an FAQ.


ASMC to wind down and discontinue new automobile sales in continental U.S.

Consumers will be protected and all warranties will continue to be fully honored

BREA, Calif., Nov. 5, 2012 – American Suzuki Motor Corporation (“ASMC” or “the Company”), the sole distributor in the continental United States of Suzuki Motor Corporation (“SMC”) automobiles, motorcycles, all-terrain vehicles and marine outboard engines, today announced that it plans to realign its business to focus on the long-term growth of its Motorcycles/ATV and Marine divisions. Following a thorough review of its current position and future opportunities in the U.S. automotive market, ASMC will wind down and discontinue new automobile sales in the continental U.S. The Company has determined the best path to achieve this realignment in an efficient and orderly manner is to restructure its operations under chapter 11. The case will be filed in the United States Bankruptcy Court, Central District of California in Santa Ana.

Consistent with ASMC’s long history of standing by its products, owners of Suzuki automobiles will be protected. All warranties will continue to be fully honored and automobile parts and service will be provided to consumers without interruption through ASMC’s parts and service dealer network.

ASMC remains firmly committed to Motorcycles/ATV and Marine products, and these divisions are competitively positioned in their respective markets, allowing for long-term growth as economic conditions improve. The realignment is intended to better position ASMC for long-term success and is a return to the Company’s roots in the U.S. market, which began with motorcycles and has grown to include ATV and marine products.

ASMC remains very proud of its high quality, high performance motorcycle, ATV and Marine products. The Company will continue to bring ASMC products to market, including its full lineup of sportbike, cruiser, touring, scooter, dualsport, motocross, off-road motorcycles and KingQuad ATV line, as well as its flagship DF300AP, state-of-the-art DF20A, and DF15A, among other models. Additionally, ASMC is working to further build its market share through continued investment in additional support for dealers through marketing and advertising activities and sales promotion. Suzuki will continue to have a strong presence as a sponsor of teams in supercross, outdoor motocross and road racing.

In evaluating its position in the highly regulated and competitive U.S. automotive industry, ASMC determined that its Automotive division was facing a number of serious challenges. These challenges include low sales volumes, a limited number of models in its line-up, unfavorable foreign exchange rates, the high costs associated with growing and maintaining an automotive distribution system in the continental U.S. and the disproportionally high and increasing costs associated with stringent state and federal regulatory requirements unique to the U.S. market. While the decision to discontinue new automobile sales in the U.S. was difficult to make, today’s actions were inevitable under these circumstances. ASMC is dedicated to honoring its commitments to Automotive customers through and after the wind down of new automobile sales in the continental U.S.

An Orderly Process to Serve Consumers

ASMC intends to work within its current U.S. Automotive dealer network to help structure a smooth transition from new automobile sales to exclusively parts and service operations, or, in some instances, an orderly wind down of dealership operations. ASMC intends to market and sell its remaining U.S. automobile inventory through its Automotive dealer network. Through and after the restructuring, all warranties will be fully honored and automobile parts and services will be provided to consumers through the dealer network. ASMC intends to honor any automobile buyback agreements that are currently in place with financial institutions.

As part of its chapter 11 filings, ASMC will submit a proposed Plan of Reorganization and Disclosure Statement that specifies how the Motorcycle, ATV and Marine divisions will be maintained and enhanced, and how its relationship with Automotive dealers will be largely transitioned to support consumers and dealers through continued parts and service operations. SMC or its nominee intends to purchase ASMC’s Motorcycle, ATV and

Marine businesses, as well as the Automotive service operation responsible for parts and warranties, through a new U.S. subsidiary that will retain the ASMC brand name.

ASMC believes it has sufficient cash on hand to operate its businesses during the restructuring. If necessary, ASMC will request permission from the Court to borrow additional funds from SMC needed during the restructuring.

Honoring Commitments

ASMC intends to operate its Motorcycles/ATV and Marine businesses as usual and is dedicated to completing the realignment process as smoothly and efficiently as possible. ASMC will continue to fully stand behind all of its products and honor all warranties from these divisions. ASMC is working with GE Capital’s Retail Finance and Commercial Distribution Finance businesses to continue providing motorcycles and ATV consumer financing programs and motorcycle, ATV and marine dealer inventory financing respectively. The Company expects existing agreements with other dealer and consumer financing providers to continue as well.

ASMC has filed a series of first day motions requesting approval to continue paying employee wages and benefits in the ordinary course, offering dealer incentives and payments under customer warranties. ASMC also expects to pay vendors in the normal course of business for goods and services delivered on or after its November 5, 2012 filing. Payments for goods received before ASMC’s November 5, 2012 filing will be made in accordance with the chapter 11 procedure.

SMC, the 100 percent interest holder in ASMC, is not a debtor in the chapter 11 filing.

ASMC’s legal advisor on the restructuring is Pachulski Stang Ziehl & Jones LLP, and its financial advisor is FTI Consulting, Inc. Nelson Mullins Riley & Scarborough LLP is serving as special counsel on automobile dealer and industry issues. Further, ASMC has proposed the appointment of M. Freddie Reiss, Senior Managing Director at FTI Consulting, as Chief Restructuring Officer, and has also added two independent Board members to assist it through this period.

Additional information regarding ASMC’s business realignment can be found at the Company’s website,, or via an information hotline at 1-877-465-4819.

Source: American Suzuki

  • Tom

    As a former Suzuki Esteem owner, I cannot tell you just how clueless and disorganized the HQ was. I’m not surprised their car division finally died.

  • alex

    All I can say is good. Suzuki needs to stop jerking off with these idiot boxes and go for moto gold.

  • JoeD

    Another example of what happens when one company tries to be all things to all people.

  • voodoovaj

    Sad news. After all the injuries and deaths stemming from their flimsy framed gsxr series, I was hoping the whole company would go under.

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  • Singletrack

    Not many tears will be shed over this news.
    Other than the original Samurais, I don’t think Suzuki produced cars that engendered any love.

    As long as the motorcycle division stays solvent…

  • Gritboy

    I’ve only known one Suzuki car owner and they were very displeased with their vehicle. Not enough of a data pool to come to any real conclusion about the cars, but obviously they’re not selling like hotcakes in NorCal. Glad they’re restructuring and focusing on Motorycles/ATVs/Scooters.

  • Gritboy

    @ voodoojav – what are all these injuries from GSX-Rs you speak of??? Just curious. It’s the first I’ve ever heard and I have friends who race on GSX-Rs.

  • Hunter

    @voodoojav Where are your stats from friend, that you can spout this crap? What about Yamaha FZ1 frame cracks? What about Honda GoldWing frame repair? Kawi EX650 weld cracking? Every company is far from perfect…

  • Bryan Niese

    Hopefully this will allow them to re-focus on their motorcycle/powersports line. Suzuki has great history in motorcycling and it would be a shame for the whole company to tank because of the terrible auto division. Their motorcycles division has been suffering. Try to look at a GSX-R 750 on their website and you can only see two pictures of the bike, the two different color options, and that’s it.

    @voodoojav I’m in agreement with others in wondering where you have gotten these ideas from. In going to trackdays I’ve seen many GSX-R’s of all varieties that have survived a ridiculous amount of hard use.

  • meatspin

    if they want to concentrate on their bikes….

    why’d they get rid of the naked Bandit?
    Why are the Vstroms so ugly? ditto with the SVs?
    the GSXRs need updating too? WTF

    the only cool car Suzuki ever made were those old Samurais. I remember they got a bad rap for flipping over and killing people. Dummies just didnt know how to drive them.

  • MikeD


    Yes, not everyone can pull a Honda…and even they have a VERY FUDGED UP motorcycle division.

    @Brian Niese & MeatSpin:


    I can’t say im surprised. I have a Suzuki car dealer a few block away from my job. Everytime i pass by the place is PRETTY DEAD and their line up ain’t really helping the cause.


    I know of this too, a friend from Tech School had it happen while under way on his 06 750. To the xtent of deaths and so…no…but then again i can see how u could easely die from a frame splitting beneath you while riding…i guess the key factor here would at what speed and traffic conditions it happened + what were u wearing at the time of the accident.

    But i do know about their failing frames on several Gixxers and TL-S. Just like every other OEM they have had their highs and lows…like Hunter mentions.

    I hope this new “plan of action” brings only good things to us and Suzuki.

    I-6 Stratosphere !!!!!!!!!!!!!!!!! FINGERS CROSSED. Just daydreaming, but hey….(^_^)

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  • mchale2020

    The Suzuki cars we saw in the US weren’t really representative of what they sell globally. It’s a shame.

    As for the splitting frames, it actually happened to a local rider I knew who owned a k5 1000. I asked a friend of mine who used to build race bikes for a living (Suzuki Ebsco Corona if that means anything to anyone) and he told me that the recall braces Suzuki issued were mostly never used by race teams and he insisted that it came down to street riders abusing their bikes through stunting and putting stress on the frames in a manner never intended from the factory.

  • buellracerx

    @mchale2020 – I can see it, too many front wheel impacts from landing hard off of wheelies. I’ll trust a builder from Ebsco/corona.

    the real tragedy here is all the suppliers to Suzuki who are taking a hit. Suzuki shouldn’t run from their debt like a bunch of cowards. Pay it off and stop racing for a couple years to do it.

  • mchale2020

    @buellracerx – The local rider I mentioned was notorious for having a hard time riding and keeping his front wheel on the ground so for me, it all adds up.

    For the record, I’d love to own a K5 1000. Also, I have no doubts whatsoever about Suzuki cycles. If you ever go to a track day, I’m willing to bet that the vast majority of bikes you’ll see there are various generations of GSXRs. What’s going on with Suzuki Auto at the moment is the result of incompetence on the business side if anything else.

  • Buzzmanrm

    “wheres the Bail Out”

    I own an auto repair garage. And the Cars we work on are from makers that sell cars. Suzuki last year I heard sold less than 2000 units they had already decided to pull out of the US market a month ago (via an Inside source) I have one Suzuki customer currently and a girl at the college that graduated the year before.

    Mitsubishi is likely headed the same way they aren’t selling well and they havent come up with a new lineup in a few years. “When all the other manufactures are recovering from their broken wings and soring again Mitsu is taking a serious nose Dive” Car-and-Driver

    Lastly the Samuri test was rigged by the NHTSB the guy said “get out of the seat I’ll make this thing role if you wont” it was caught on camera years ago (I couldn’t even drive when I saw that video. But the bad publiciity has followed Suzuki since.

  • Hunter

    @mchale2020 – This, exactly.

    Ever since this and similar episodes, new “drop rigs” have been used by several OEMs to test repeated hard landings to the front suspension and frame/headstock. It’s actually really fun to watch.

    Suffice to say that you shouldn’t have to worry about this sort of failure ever again from any OEM, especially Suzuki. But at the same time, if we demand that bikes get lighter and lighter (even though emissions equipment keeps adding weight), durability will always be a compromise.

  • Tom

    mchale2020 says:

    The Suzuki cars we saw in the US weren’t really representative of what they sell globally. It’s a shame.

    Definitely true. If you live in a major city, there is NO better car than a Suzuki Carry van. yeah, I know about the 660cc engine, but I’ve talked to my wife about trading in our Sienta for a Carry Van. Also, there was the Suzuki Cappuccino that you can only get in Canada now due to their less restrictive 15 year rule. Put a Hayabusa engine in one and it’d be the most fun toy that you could have with your clothes on.

    Sadly, many maunufacturers don’t sell their best in the US. Do Americans even know what Toyota Century is?