American Suzuki Motor Corp to become Suzuki Motor of America, Inc.
U.S. Bankruptcy Court approves Chapter 11 restructuring plan that involves closure of struggling automotive sales division and “selling” the motorcycle/ATV/marine division to newly created Suzuki Motor of America, Inc.
The U.S. Bankruptcy Court for the Central District of California in Santa Ana and creditors of American Suzuki Motor Corp approved the company’s Chapter 11 restructuring plan, paving the way for closing down its struggling automotive sales division, and the “sale” of its motorcycle/ATV/marine division (as well as the automotive parts and service, as Suzuki will continue to support current owners of Suzuki automotive product in the U.S.) to its new namesake, Suzuki Motor of America, Inc. The new U.S. company will still be a wholly owned subsidiary of the parent Suzuki Motor Corporation in Japan. The process is expected to begin on March 31, 2013.
"Today's confirmation is a significant milestone and is one of the last remaining steps in our realignment and restructuring process," said M. Freddie Reiss, the Company's Chief Restructuring Officer. "During the next few weeks, we will take final steps to implement the Plan, which will allow the Company to sell its Motorcycles/ATV, Marine, Automotive parts and service divisions. This will promote the long-term growth of the Motorcycles/ATV and Marine divisions, as well as providing automotive parts and service through the dealer network."
Plummeting sales of its somewhat sparse U.S. automotive catalog while supporting the extensive dealer network became an enormous financial drain on American Suzuki. Combined with its stagnant motorcycle/ATV/marine sales due to the worldwide economic meltdown, this forced the company to take steps to close down the automotive sales network so that it could concentrate on the motorcycle/ATV/marine bread-and-butter that gained the company’s foothold in the U.S. This Chapter 11 restructuring only affects the American subsidiary; parent company Suzuki Motor Corp’s automotive sales continue to remain strong in other countries such as the burgeoning Indian market, as well as southeast Asia and the domestic Japanese market, and its worldwide motorcycle sales are still continuing to remain stable.