Suzuki Trims Network; Stays The Course

Automaker Suzuki, by far the smallest of the manufacturers from Japan, is planning to stay put in the United States despite seeing sales tumble by more than 60 percent in recent years.

American Suzuki Motor Corp. told Automotive News that it has bought out 50 dealers, reducing its American dealer network to 304 retail outlets from the 354 it had in March. In its peak sales year (2007) Suzuki had 486 dealers who sold 101,884 cars. Last year, Suzuki sold 38,669 vehicles, but this year sales may drop below 25,000 units at the pace 2010 sales are going. Suzuki is the only car company not experiencing a rebound from 2009′s awful sales.

Poor Planning

Suzuki’s problems over the past few years can be attributed to stiff competition, but there are two larger factors at play: marketing and product. Recently, I sat through what had to be the worst car commercial I’ve seen in many years, this one from Planet Suzuki in Raleigh, NC. Turns out that the ad is part of a national advertising campaign, picked up or modified for select markets across the country and touting the price of the Suzuki Kizashi, the company’s midsize sedan.

The Kizashi is a good model, but the ad is terrible. Actors feigning surprise at the sticker price just doesn’t cut it. The spokeswoman is fine, but the people who are expressing amazement are acting ridiculous.

Product Line

Suzuki’s product mix isn’t much to speak about either. Beyond the Kizashi, there isn’t one model that stands out. That’s too bad because in years past the Swift and various compact SUVs filled an important void. Today, I imagine a lot of Suzuki shoppers have probably fled to Subaru, Kia and Hyundai, car brands who managed to sell more cars in 2009 than 2008, the only three companies to do so.

Notwithstanding Suzuki’s insistence that they will remain around, the company has a lot of work cut out for itself if it plans to survive.

Stiff Competition

General Motors, Ford and Chrysler are in a much strong position than a year ago, Hyundai and Kia continue to gain ground, and Suzuki’s Japanese rivals remain formidable. Volkswagen is expanding its operation too.

In a market where 16-17 million cars are sold, Suzuki might stand a chance. But, the market pie has shrunk and Suzuki’s competitors simply have the Japanese automaker out gunned. Look for Suzuki to make a gallant effort to stay in America, but expect customers to not be moved.