American Suzuki files for bankruptcy protection

Business to be 'realigned' to focus on bikes

SUZUKI has announced that its American subsidiary – American Suzuki Motor Corporation – is to 'realign' its business under US bankruptcy laws. 

In America, a firm can use “chapter 11” of the country's bankruptcy laws to protect itself from creditors while it reorganises its business model to recover from financial problems - American Suzuki Motor Corp is reported to be $346m in debt, of which $173m is owed to Suzuki group companies, suggesting that the American outfit has been ailing for some time. In Suzuki's case, that reorganisation means stopping selling cars in the States and focussing instead on bikes, marine products and ATVs.

While Suzuki's car business has been struggling for a while, even seasoned industry-watchers appear to have been taken off-guard by the announcement, which was made late on November 5. 

Suzuki's bike business is certainly stronger than its car arm in America, but has still faced enormous challenges since the start of the financial crisis. The firm didn't import any 2010-model street bikes to the States; it spent the whole year clearing its backlog of existing stock after sales were nearly halved in 2009.