Suzuki's Vandiver: 'Future is best served' in powersports

Publish Date: 
Nov 6, 2012
By Dennis Johnson

BREA, Calif. - One day after filing for Chapter 11 bankruptcy protection and announcing its exit from auto sales in the U.S., American Suzuki Motor Co. is looking ahead -- to a business plan focused on powersports.

The restructuring allows the company to target its research and resources on developing products for the motorcycle, ATV and marine markets, a plan that should help bolster Suzuki’s network of more than 1,800 powersports dealers, according to Larry Vandiver, the OEM’s senior director of motorcycle and ATV sales and marketing.

“We have decided, after a lot of soul-searching, that our future is best served in the motorcycle, ATV and marine business,” Vandiver told Dealernews. “What we’ll be doing as time marches on is committing more resources and focus on those businesses … on coming out with new and innovative products.”

He said the restructuring is a return to the core of what made the company successful — first motorcycles, and then ATVs and marine products.

Despite ASMC's attempts to rebuild its automotive division here, a number of factors prevented the company from succeeding. The General Motors bankruptcy several years ago saddled ASMC (which made motors for GM) with a large debt burden; slow sales and regulatory challenges hindered production; a strong Japanese Yen made it expensive to import units from Japan; and the company began facing heavy competition in the small-car segment from Kia, Hyundai and others. These and other factors prevented the OEM from introducing new automobile models into the U.S. market.

“Without new products, we didn’t see the volume was going to grow,” Vandiver said, The auto division would continue to be a drain on the resources and profitability of the U.S. company, he noted.

At the time of the announcement, Suzuki had already started phasing out its automobile business and said it would continue to work with its estimated 200 U.S. auto dealers to make sure that all units in the pipeline are sold. The OEM has only three powersports dealers that are also auto dealerships, and one that is a combination auto/marine dealership; thus the impact on the powersports side should be minimal, Vandiver noted. “So far, for motorcycle, ATV and marine dealers, there’s nothing that’s changed,” he said. “It’s business as usual.”

According to the restructuring announcement, GE Capital will continue to offer dealer floorplan financing and retail financing for consumers. The OEM will also continue to support and sponsor Supercross, outdoor Motocross and road racing teams, and will invest in additional advertising and promotional support for its dealer network.

ASMC will face its retailers at the OEM's annual dealer meeting Nov. 10-12 in Las Vegas. The OEM plans to unveil future business plans and introduce new models to the 2013 lineup. Vandiver says that executives from parent company, SMC, will address the U.S. dealer network during the meeting.