Tuesday, 06 November 2012 10:24
TOKYO: Japan's Suzuki said Tuesday it would shut down its money-losing car business in the United States and file for bankruptcy, citing a strong yen and weak demand for its small cars in the US market.
But American Suzuki Motor Corp. (ASMC), which said it has debts of $346 million, added that it would continue selling motorcycles, all-terrain vehicles and marine products -- such as outboard motors -- in the country.
Suzuki sold about 26,000 vehicles in the US in 2011, a fraction of rival Japanese automakers such as Toyota, Nissan and Honda.
ASMC "recognised it will be unable to maintain profitability with respect to its automobile marketing business", the firm said in a statement.
The Suzuki division, which employs about 365 people, said it has faced difficulties from the value of the Japanese currency and weak demand for its compacts in the US market.
The yen, which hit record highs against the dollar last year and remains strong, has dented Japanese manufacturers by making their products less competitive overseas while eroding the value of repatriated foreign income.
Suzuki's US unit said it would "redirect" its resources to the sale of motorcycles, ATVs and marine products "where the prospects for profit are good".
Warranties on vehicles already sold in the US market would be honoured despite the filing, it added.
The Japanese firm has focused much of its attention on emerging markets including India where its profitable Maruti Suzuki joint venture is the nation's biggest automaker.
Copyright AFP (Agence France-Presse), 2012