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Wrong. The worst performer on a percentage basis was Suzuki, down 60.2 percent in the first half of 2009. In June,
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Why would an Asian brand that builds small, fuel efficient vehicles the recipe for Detroit’s rebirth as envisioned in Washington be at the bottom of the heap?
Blame it on a shrunken product lineup, skimpy marketing and an ineffective captive finance company, which have made Suzuki all but invisible among the Asian players.
Suzuki is the latest second tier Japanese brand to hit the skids in the United States, and some analysts wonder whether it is the next one headed for oblivion in this market.
"Suzuki had momentum, but they lost it," says a Northeastern dealer who declined to be named.
The company has failed to transfer the strength of its brand in other types of vehicles to its cars and crossovers,
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The decline has been rapid. In 2006, American Suzuki finally achieved a decade long quest to sell 100,000 vehicles,
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In a May 25 conference call with Suzuki’s national and regional sales managers, 17 Florida dealers admitted that combined they had sold just nine vehicles that month.
The slide already has had an impact on the dealership count, which has skidded from 460 stores in July 2008 to about 380 today.
A Suzuki official says two thirds of Suzuki dealers are in the black. But Mark Johnson, a dealership buy sell consultant in Seattle,
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Suzuki has drastically pared its vehicle lineup. The Reno,
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Also production of Suzuki’s XL 7 mid sized SUV has ended at CAMI, a Canadian joint venture with General Motors. Suzuki wasn’t selling enough XL 7s to keep capacity high enough. So rather than eke out more units at a loss, production was halted last fall.
Those inventories have mostly run out since production ended, and there is no time frame for XL 7 production to resume or for a replacement vehicle. A crossover based on the Kizashi platform has been rumored.
That leaves the SX4 compact sedan and hatchback and the Grand Vitara crossover as Suzuki’s main vehicles. But retail sales of those vehicles have tanked.
Suzuki also has cut its reliance on fleet sales. By this time last year,
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Technically, Suzuki’s sales decline this year is surpassed by Scion’s 60.4 percent drop. But Scion is a niche brand aimed specifically at Gen Y buyers who could have problems getting credit in this economy.
"We have to think holistically," Brown says. "We have made huge quality leaps. We have hit a rough patch, but there is every reason dealers can be profitable."
So should Suzuki dealers be poised for a rebound, or is the franchise beginning an irreversible downward spiral?
Consultant Johnson is pessimistic about the brand’s future,
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"I see things getting worse for them,
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Johnson says Suzuki management "is its own worst enemy."
For instance, he says,
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Dealers also are unhappy that an incentive for sales personnel paid by Suzuki has recently been lowered from $300 to $100 per unit sold. That is just one sign of Suzuki’s waning marketing support,
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"They stopped advertising and promotions of any consequence," says the dealer from the Northeast. "They are off network TV, and their cable advertising is seven to 10 days max. The finance company is useless. They used to buy low. Now they don’t buy anybody."
Suzuki’s Brown says funds for sales incentives were diverted to finance a "free gas for summer" promotion on the SX4 lineup,
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Brown says that the Kizashi sedan coming this fall will give new life to the brand and that dealers who persevere will be rewarded with a sales turnaround. And many of Suzuki’s fallen dealers had dualed with a domestic franchise that went out of business first, he says.
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