REPORT: Analyst urges Mitsubishi, Suzuki to exit U.S. market

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!

[Source: Bloomberg]