BREA, Calif. - As part of its Chapter 11 reorganization plan, American Suzuki Motor Corp. is reducing its U.S. dealer network by about 10 percent — 98 dealers or so — most of which were franchises within multiline stores, according to the OEM.
Those dealers affected were notified by ASMC via letters sent out recently under the plan approved by a bankruptcy judge in early March. The other 90 percent of the network also received letters informing them that their franchise contracts will be picked up by the new Suzuki Motor America Inc.; this is the name of the reorganized company that is buying Suzuki’s U.S. motorcycle, ATV and marine business — now a bit more than 800 dealerships — for approximately $65 million.
Larry Vandiver, ASMC’s senior director of motorcycle and ATV sales and marketing, told Dealernews the actions affect a mix dealers that are either low-performing or are voluntarily closing. He stressed that all of the notification letters have now been sent.
ASMC looked at a number of factors in determining which of the dealers would be cut from the network; this included unit sales, service, parts sales, retails sales, and the opportunity in their given market, Vandiver said. “To give you an example, out of last year’s 12-month retail sales, these 98 dealers represented 2.5 percent of retail sales. In the last three years, they represented only 2.8 percent,” he noted.
As part of the plan, ASMC is offering to repurchase all of the eligible inventory — new units, parts and accessories — and resolve each claim to 100 percent from the dealers not being picked up by the new company, Vandiver said.
For example, Dealernews obtained a letter informing a dealer principal that the store’s Suzuki franchise would not be renewed and that as of March 31 the business would no longer be a Suzuki dealer. The dealer is being offered $10,000 in compensation. (continued)