American Suzuki Motor announced that from 219 US auto dealers 213 agreed to halt new-vehicle sales in exchange for money and maintenance-only contracts.
On November 5th, American Suzuki filed for Chapter 11 bankruptcy protection and announced it will wind down U.S. auto sales and focus on selling boat engines and motorcycles. The automaker proposed an agreement to its US dealers offering them cash and new contracts to run Suzuki parts and service outlets if they agree to surrender their franchise deals.
Freddie Reiss, American Suzuki’s chief restructuring officer, declared that the 213 dealers which agreed with these conditions account for 98% of the automaker’s new-car sales volume and include the company’s 50 highest-volume dealerships.
“As these agreements demonstrate, we are working within our current U.S. automotive dealer network to help structure a smooth transition from new automobile sales to exclusively parts and service operations,” said Freddie Reiss.
Dealers who accepted the deal by November 30th will receive half of the cash settlement within 10 days from that date and the full sum by the end of the bankruptcy case. In November Suzuki sold 2,224 vehicles in the US, an increase of 22% compared with November 2011. From January to November the automaker sold 23,412 vehicles, a fall of 3% from last year.