REPORT: Analyst urges Mitsubishi, Suzuki to exit U.S. market
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Two U.S. domestic automakers have now entered and emerged from Chapter 11 bankruptcy. Other automakers that were doing well before the economic implosion are now scrambling to cut costs and get people into showrooms with creative incentives. And then there's Suzuki and Mitsubishi. While each brand offers a model or two that's genuinely competitive, neither has been able to fend off the huge sales decline that's hit the U.S. auto industry.
Suzuki sales in the U.S. were down a remarkable 78% last month, while Mitsubishi fared just a bit better with a 42% decline. These types of numbers have at least one analyst from Fukoku Capital Management, Inc. advising each Japanese brand to withdraw from the U.S. market altogether. For its part, Mitsubishi says no way. Bloomberg quotes the company's president saying bluntly, "We will never give up the U.S. market." He went on to say that Mitsubishi won't seek alliances with other automakers or use its assembly plant in Illinois to build vehicles for other brands. In the meantime, Mitsubishi has shuttered its U.S. design studio and canceled the Raider pickup supplied by Chrysler.
Suzuki, meanwhile, has the Kizashi mid-size sedan on the way. Sales me be down now, but don't expect the automaker to pull out when it's got a potential game changer on deck.
While the analyst's advice is not surprising considering the numbers, the numbers aren't surprising when you consider the lineups on offer in Mitsubishi and Suzuki showrooms. Sure, Mitsubishi has the Lancer EVO and Suzuki's SX4 is not a bad little car, but the rest struggle to even compete and are backed by little-to-no creative marketing.
What we may be seeing are this market's two smallest Japanese import brands going into hibernation until the U.S. economy recovers. Other markets around the world are still profitable for each and Suzuki still makes some of the best motorcycles on earth (an association still far underutilized by its autos division). The question remains: Will either brand have anything worth buying when Americans open up their wallets again? Hat tip to Wave54!
Gallery: 2009 Mitsubishi Model Line Up
Gallery: 2009 Suzuki Model Line Up
[Source: Bloomberg]
Reader Comments (Page 1 of 5)
DiRF 7:35PM (7/10/2009)
Real shame, the SX4 is a damn competent compact car... the AWD wagon is kinda in a niche in America by itself... the SX4 is lightyears ahead of the Aerio that it replaced. They really need to try bringing the Swift and maybe some of their keicars over, see how they do.
Mitsubishi... well, they have the Evo... and maybe the Eclipse is a somewhat still-popular sporty compact...but, ehhhh.... they can wake me if they bring the i over. (and not the electric i... that thing is so bloody expensive)
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ZachM 7:59PM (7/10/2009)
Eclipse still seems pretty popular yeah, although I prefer the previous generation...
Any word on whats in the future?
Judy Zik 8:20PM (7/10/2009)
Add the Outlander to the list of overlooked but quite competitive vehicles (if you ignore the laughable third row seat).
Otherwise one of the biggest flaws for both is lack of product. You can't run dealerships based on one or two models. Look at how well Hyundai has done by expanding their product lineup. Suzuki`s new car may help but unfortunately they killed their XL-7 a bit too soon since the New Equinox looks like it will be a contender.
What is on the burner at Mitsu is anyone`s guess but their lineup is getting old fast.
Both companies should apologize to their shareholders for not importing the vehicles they are really good at making (small cars). Suzuki is rebadging god awful Aveos and selling them as Swifts in Canada for crying out loud. They are the masters of the Kei car segment in their home turf. Why on earth would they import a horrible dog of a car from Daewoo? Mitsubishi has the Colt overseas and the "i" cars. Instead of bringing these over their American office was more worried about making sure we have 3 different sizes of SUV's and 5 variations of the Lancer. Then there is the dumbest new slogan ever created. Whoever came up with "drive@earth" needs to drive@cliff.
If the North American arms of these companies don't go bankrupt it wont be for lack of trying.
AP404 7:38PM (7/10/2009)
The reason Suzuki sales are down are because they were still selling the daewoo cars under the Chevy license, now they are selling their own cars. I am pretty sure the SX4 numbers are above last years.
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Soulquarian 8:04PM (7/10/2009)
Mitsubishi makes models other than the EVO?
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downhill.specialist 7:48PM (7/10/2009)
Suzuki Motors USA, at least, should fair well due to it's ever popular motorcycles. Their cruisers are not the most popular, but their sport bikes and standards continue to do well; and should help see them through things.
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Conundrum 8:03PM (7/10/2009)
I'm not aware of any Suzuki dealerships in the area that advertize both bikes and cars at the same location. That may help somewhat. "Oh you want REAL fuel efficiency, well let me show this sweet little ride over here."
I don't know. Maybe they already sell bikes and cars side by side. I can't even think of where my local suzuki dealer is located... maybe that is another problem they face... inability to stand out among the crowd.
tankd0g 10:30AM (7/11/2009)
It is well known in the bike business that teaming up with a car dealership quickly leads to the death of the bike side of things. The margin in motorcycles is small to begin with and the retail prices are relatively low compared to cars, both result in commissions that car salesmen would scoff at and having a bike only salesmen on staff is akin to having a salesmen who can only sit at the kiddy table. BMW tried it and they ended up with dealerships stocking one or two bikes and no one in the building that knew anything about them. Honda for some reason recently thought they could make it work and is currently trying to get their car dealers to sell their full line of products, which of course none of them want to do.
Motor_Yakuza 7:49PM (7/10/2009)
The Evo and the Eclipse are brilliant cars, maybe crappy car companies like tata and chinese should leave first.
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Affalterbach 8:28PM (7/10/2009)
Neither Tata nor the Chinese are in the NA market.
jamie 4:16PM (7/11/2009)
Affalterbach9
"Neither Tata nor the Chinese are in the NA market."
Think again.
Jaguar.
Land Rover.
Next week, maybe Hummer. LOL
yoyoyoyo 7:53PM (7/10/2009)
1st of all Mitsu will never leave the US market and neither will Suzuki. The problem with Mitsu is nothing. They will be fine after the slowdown. Suzuki makes a great car but dont know how to market their products. Do you remember the last time you saw a Suzuki commercial. They are kinda rare. Suzuki sells alot of vehicles worldwide and in fact are the number one selling brand in India. Also back in the late 80's and early 90's consumer reports slammed Suzuki for being easy to rollover. This was a total bias test they did and it was held up in court for yrs. This completely wrecked Suzuki for the US until now. So if they start to market properly now they can definitely recapture some market share. Mitsu will only continue to grow, because they build a good product. Take it from me, Ive worked for both
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Aloysius Vampa 7:56PM (7/10/2009)
I see a lot of commercials for the SX4.
downhill.specialist 8:01PM (7/10/2009)
Actually Mitsubishi has had a lot of problems in the US for a long time. Lackluster models, poor marketing, poor value to performance.
I mean really, when you say Mitsubishi, what do you think of? The EVO. DSMs? That's pretty much it. They don't have a good public image for innovation or quality vehicles, and they don't advertise what good things they have. They have some excellent vehicles, but very few people know about them, and dollar to feature there are better ones out there. Most people only lightly glimpse at Mitsubishi when looking at a new car now. The simple proof is their decline in sales compared to other companies.
That much said I don't want them to pull out, but I wouldn't really shed any tears either. I'm glad they have the gumption to stick it out here, and hopefully they will pull back and do better post-slump.
nrb 12:00AM (7/11/2009)
In the midwest, Suzuki dealerships are folding faster than GM dealerships. Seriously.
While there's nothing wrong with their product, there is very little good about it. Also when it comes to power vs mpg, they lag behind everyone else. It's a shame that this comes from the company that brought us the Swift/Metro.
Mitsubishi needs some help in the styling department. The Lancer looks like it's from the 80's. Not to worry, the Lancer Evolution puts a big honkin wing on the back to make it look better? The Eclipse use to rule the roost, but it's been passed on by.
John 5:26PM (7/13/2009)
That was actually Isuzu that had the bad rating from Consumer Reports. The front cover of their magazine showed the Isuzu SUV with the right front tire off the ground while going through the slalom test. Doesn't matter though, Mitsubishi and Suzuki have nothing to offer a new car buyer in North America. If they both leave the NA market, no one will notice.
futurama 8:01PM (7/10/2009)
They both have something excellent in their deck of cards, but just don't know how to play well.
They both have excellent small, efficient vehicles else where, Swift and Colt come to mind, yet we do not see them.
Lancer, EVO, and Outlander are great products. However, having excellent product nobody knows don't sell. Mitsubishi needs to take some risk like Hyundai as for their sales/marketing strategy.
For Suzuki, yes, they need to build upon the awesome motorcycles they build. Their size and product portfolio just aren't equipped to go head-to-head with big players. They should focus on something more niche. Find that need and filling it. Maybe it's a small sports car with exhilaration borrowed from GSXR family. Maybe it's american version of Wagon R. Maybe purposely built truck for mainly hauling their motorcyle/atv products (not the new forgettable pickup, clone of Frontier)...
Otherwise, yes, they should exit the US market, and make all the fans of EVO (does Suzuki have any cars that have fans?) cry...
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AngeloD 8:35PM (7/10/2009)
""Maybe purposely built truck for mainly hauling their motorcyle/atv products (not the new forgettable pickup, clone of Frontier)...""
This would be my pick. The X-head pickup concept they (Suzuki) showed a few years back was brilliant. Too bad there was no followup.
JC 8:04PM (7/10/2009)
Suzuki is taking their lumps with lower sales volumes. Other brands are taking their lumps with high marketing costs and still lower sales volumes.
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JBob 8:54PM (7/10/2009)
I'll just add my 2 cents that the Lancer is a GREAT alternative to buying just another cobalt. I have 152 friends with Cobalts, and the other 300 have used Mustangs. If I felt like buying a new car, the Lancer would surely be it, even though its difficult to picture myself in a 4-door. Peppy 4-cyl, same as everything else in the price range. only downside is that theres a bit too much road noise, and my local dealer doesnt have 1 in black!
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