Suzuki’s American unit files for bankruptcy

November 13, 2012 6:04 pm Published by

Slow sales and a patchy safety record may have led Suzuki’s United States division to file for Chapter 11 bankruptcy protection. However, the company has good sales in other emerging markets such as India and Southeast Asia. In Japan, Suzuki meets the requirements for inclusion in the “kei” vehicle market whose cars must meet small size requirements and power limits, and the company’s cars have historically done well there. A strong yen has also made it more fiscally wise to sell cars in Japan rather than shipping them to America.

The distributor for American Suzuki filed its bankruptcy petition with a declared $346 million in debt. The company cited low sales, a limited lineup and poor exchange rates as reasons for the petition. The company also cited the high cost of doing business under United States regulatory requirements as another reason for the decision.

The company will continue to sell its inventory at dealerships, and current owners will be able to acquire parts and exercise rights under existing warranties. The company will not stop sales of motorcycles, boats and ATVs in the United States.

A business bankruptcy for a company of this size can be very complicated and requires a long process of compiling creditor information and settling debts. For smaller businesses, however, the process may be simpler, and any business struggling to meet its obligations may benefit from a bankruptcy filing. Business bankruptcies allow companies to reorganize themselves and pay creditors while, in many cases, continuing to operate to bring in income that can help offset costs. A bankruptcy attorney can work with companies struggling to pay bills to help them take control of their finances.

Source: The New York Times, “Suzuki’s Small Cars Were Wrong Fit in U.S.,” Hiroko Tabuchi, Nov. 6, 2012

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