American Suzuki Motor Corp. filed for Chapter 11 bankruptcy protection and will stop selling cars. Suzuki will only focus on manufacturing motorcycles, all-terrain vehicles, and marine equipment.
Were you surprised by the bankruptcy decision?
I am not surprised by Suzuki's decision to file for bankruptcy. But I am surprised about the timing. I thought that Mitsubishi would be first out of the two to exit the United States. I figured that with the automotive market picking up in the States, Suzuki would benefit from it.
What went wrong at Suzuki?
I think a number of things went wrong. The first being the strong Yen. The big Japanese brands, Toyota, Honda, and Nissan are able to deal with those added costs. Suzuki does not have a big presence here so they are impacted by the value of the Yen more than the other Japanese brands. Another issue was that consumer liability wasn't up to par compared to the competition. Suzuki did not commit to their products as they should have. Their vehicles got pretty stale and fell to the back of their classes. The advertising campaigns for their vehicles wasn't as strong either. Marketing was an issue that was not dealt with very well at the company. Most people did not know that Suzuki still made vehicles.
How did you feel about Suzuki's model lineup?
Driving wise the SX4 was really good. The Kizashi was the best product in the lineup because of its design and fun to drive nature. But the entire lineup suffered from bad interior quality. I would say their vehicles offered a decent value proposition but not a great value. I feel that even if Suzuki wasn't building a lot of cars they could have focused on building good cars. Subaru is a prime example of a smaller Japanese automaker that doesn't build as many cars as Toyota, Honda, or Nissan but they build great vehicles. By building good quality cars Subaru is setting sales records.
What are your thoughts on the Suzuki Kizashi & Swift?
I think in terms of enthusiast buyers the Swift could have been a huge hit. I doubt that it would have caught on with mainstream buyers but it is hard to say. The Kizashi is a great vehicle that many consumers really didn't care about. I think some people just did not care that it was fun to drive. Those buyers were more into interior space and fuel economy. The Kizashi was classified as a midsize sedan but was smaller than the competition. The Swift could have been a missed opportunity for the brand. The Kizashi just suffered from the lack of advertising.
What will happen with the current dealer network?
Suzuki is going to continue honoring warranties through the bankruptcy. Many of those dealerships already exist to service other Suzuki products. Some people will definitely lose jobs. But I don't see it having a huge impact on the market. This cannot be viewed in the same way of Chrysler's bankruptcy process in which many dealerships closed.
Did the partnership with Volkswagen have an impact on Suzuki?
I think that the partnership between these two could have worked out well for Suzuki. They could have been able to cut costs on future vehicles and products. something that could have done well to them. I'm still not a 100% if the partnership would have kept them from filing for bankruptcy in the U.S.
Will Mitsubishi be next?
Their marketing is just as bad as Suzuki's. It has some name recognition but not enough to win over many buyers. There is a small percentage of enthusiasts who enjoy the Evo. I do think that their product line needs a major overhaul. Pricing is a big issue that Mitsubishi needs to address. It is evident that they are at a crossroads. Mitsubishi needs to put some effort into their products. They will have a fight on their hands if they are serious about staying in the U.S. market.
Is it smart that Mitsubishi wants to solely focus on EV vehicles?
It might be the short term solution. I think they are better off revamping their lineup. I think they made a mistake with the MiEV. It doesn't get quite the same range and build quality as the Nissan Leaf. Overall the Leaf is a much better product. I think Mitsubishi made a huge mistake axing the Eclipse from their lineup. That car had a huge following and Mitsubishi just did not give it the attention it deserved.
I want to thank Amanda Batista for setting up this interview. I also want to thank Tim Healey for taking the time to answer my questions and chat with me about the auto industry. Be sure to check out Web2carz.com.
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