American Suzuki Motor Corporation (ASMC), which declared bankruptcy in early November, has been approved by the courts for up to $100 million in debtor-in-possession financing to enable it to shutter its US car business. ASMC had received a $45 million loan from the Japanese parent company, Suzuki Motor Corporation (SMC), last month in order to make repayment deals with its franchise dealers. At the same time, ASMC was awaiting final court approval of this larger loan.

Out of the newly approved funds, $50 million can be used for operations, and oddly, the other $50 million can be put toward purchases of new inventory from SMC. That's right, even as existing inventory was headed for a smooth exit with the help of incentives, customer demand for orphan Suzuki models is so strong – last month's sales were up 22 percent compared to 2011 – that ASMC plans to purchase 2,500 additional cars from SMC that were built after the bankruptcy announcement. Good news for the owners of those vehicles: the top 50 dealers, representing more than 98 percent of ASMC sales, will become parts and services centers.

The press release below has more information. Unlike its recent tenure here, the end of Suzuki cars in the US looks like it's going rather well.
Show full PR text

ASMC continues realignment to focus on Motorcycles/ATV and Marine divisions

Company intends to bring additional automobile inventory from Japan to dealers in the continental U.S. to meet current consumer demand

BREA, Calif., Dec. 6, 2012 – American Suzuki Motor Corporation ("ASMC" or "the Company") today announced that it has received Court approval for Debtor-In-Possession ("DIP") financing. As a result, the Company will be able to borrow up to $50 million for operations and up to $50 million for purchases of inventory from Suzuki Motor Corporation ("SMC"). These funds will help ensure that ASMC has the cash necessary to operate its business during the pendency of the chapter 11 case. The motion was previously granted Court approval, on an interim basis, on November 7, 2012.

In response to continued consumer demand, dealer interest has remained high in continuing to order and receive shipments of Suzuki automobiles as long as they remain available, ASMC intends to use a portion of the DIP funds to purchase and ship 2,500 additional cars from Japan to the continental U.S., which have been manufactured since ASMC announced its restructuring. Earlier this week, the Company released its November 2012 sales numbers, reporting that it sold more than 2200 units last month, an increase of 22% compared to the same period last year.

As previously announced, ASMC is continuing to market and sell its remaining U.S. automobile inventory through its national network of automotive dealers. Further, ASMC continues to provide marketing and incentives to help promote the continued sale of the automobiles remaining in dealer inventory and the pipeline. This includes, zero percent financing for up to 72 months for qualified customers through an agreement with Ally Financial Inc. All automobile warranties will continue to be fully honored in accordance with their terms, and parts and service will continue to be provided to consumers through ASMC's parts and service dealer network. As of November 30 2012, automotive dealers representing all of the top 50 and more than 98% of the total volume of ASMC's continental U.S. automobile sales have agreed to transition to parts and services operations.

ASMC announced on November 5, 2012, that it plans to realign its business to focus on the long-term growth of its Motorcycles/ATV and Marine divisions and to wind down and discontinue new automobile sales in the continental U.S., following a thorough review of its current position and future opportunities in the U.S. automotive market. ASMC determined that the best path to achieve this realignment in an efficient and orderly manner was to restructure its operations under chapter 11. The case was filed in the United States Bankruptcy Court, Central District of California in Santa Ana.

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.

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    • 1 Second Ago
      • 2 Years Ago
      The SX4 xover for was my first car, its been great to me, even though i now drive a new Honda, i was always looking forward to the next generation SX4 xover.
      • 2 Years Ago
      For a company that's going into bankruptcy the cars do not appear to be all that cheap from my initial online research... They're all selling at or near suggested retail with only the manufacturer incentives available.
        • 2 Years Ago
        Maybe as they sit on the lots the incentives will grow? I dunno - I'm going to test drive a Kizashi tomorrow
      Pj Taintz
      • 2 Years Ago
      I dont fully understand why someone would need a go out of business???
        • 2 Years Ago
        @Pj Taintz
        Its a loan to allow them to sell more vehicles temporarily (which when the vehicles are sold the loan will be paid off) as they taper down business. Not a bad deal for the parent company SMC that will get an extra 2500 cars sold in the process.
        • 2 Years Ago
        @Pj Taintz
        You guys are partially correct. The loan is to pay off debt to parts and cars that was ordered to build, and moreover, maintain the warranties of cars recently sold. Because, Suzuki is still doing business in other parts of the world, reputation is very important.
      • 2 Years Ago
      If only they had sold the Swift in the US. Maybe things would be different for them. Their best car and they completely omit it from the US. Bad decision. Again, a hatchback.
        William Flesher
        • 2 Years Ago
        I think you are spot on. But the Swift is only part of the picture. The Jimny (think Samurai) was a natural for the US, and could have been modified to American specifications for a mere fraction of the Kizashi's cost, and owned it's own niche market. A market that Jeep/Fiat are more than happy to claim.
      Larry Green
      • 1 Year Ago
      So... when I filed bankruptcy a few years ago... no one offered me a huge settlement. Taking this opportunity to call bullshit.
      • 2 Years Ago
      I live near the Suzuki dealership in Highland, IN. It's tiny, but it is (somehow) the biggest Suzuki dealership in the state. Their billboard says basically WE'RE NOT GOING ANYWHERE. If I could get a really good deal on a Kizashi, I'd definitely consider it...if they're gonna turn into a parts/service center, especially. By the way, Suzuki was slaughtered by their "big comeback" a few years ago selling the awful Forenza. Sales went up, customer satisfaction went way down.
        • 1 Year Ago
        I am a proud 2004 Suzuki Forenza, purchased brand new from a Suzuki dealer in Santa Ana, Ca. in 02/2004. Not sure WHAT you mean by 'awful Forenza'. But after 10 years or ownership, some basic maintenance & some high mileage driving to commute out of town to work for 3 years, my little girl hasn't missed a beat. I am devasted to see Suzuki leave the U.S. Don't understand why they could never get a foothold here. Just look at the the Car and Driver rating on the new Kizashi. It was rated 8. something on 10 point scale! Great Cars!
      • 2 Years Ago
      Here in the Canadian part of America David Suzuki is more noteworthy than the car company, but it looks like Suzuki Canada is still doing OK and will continue selling cars - at least that was the story a month ago - (the title includes 'NOT' even though the URL doesn't...)
        • 2 Years Ago
      Joey Mcfreely
      • 2 Years Ago
      I wish someone would pick up the SX4 and make it under one of their nameplates. Like GM with a cruze eco 1.4T engine under the hood or something like that.
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