Suzuki Shrinking Monthly as Execs Favor Cost Cutting Over Investment

A report out this morning documenting the downward spiral that Suzuki is caught in hints strongly that the Japanese automaker is looking to exit the North American marketplace.

For starters, sales are down. From a total of just over 100,000 in 2007, Suzuki moved just 26,618 units last year and is poised to deliver an equally unimpressive year end result with sales for the first quarter ringing in at 6,561 units. That figure is actually down 2 percent from the year before, in a market that’s up 13 percent.

As a result of low sales, as well as an initiative by Suzuki to shed franchises, the company is down 32 franchises compared to a year before. Worse than that, roughly 150 of Suzuki’s remaining 246 dealerships sell five or less cars per month.

That’s just the start of the ominous news, however. Suzuki skipped the Detroit and LA Auto Shows this year and hasn’t posted a social media message on Twitter or Facebook in months. And after the brand’s top product planning and marketing exec left the company in January, Suzuki announced he wouldn’t be replaced.

Quotes from an unnamed source speaking to Automotive News, as well as from a former Suzuki dealer, hint that the automaker has shown no signs of investment but instead is looking to reduce the hemorrhaging of cash – a not uncommon wind-down tactic. “They seem to be more interested in controlling expenses than increasing revenue,” one source said.

In fact, earlier this year Suzuki ceased paying for customer satisfaction index data from J.D Power and Associates – a key piece of information any automaker uses to help monitor its dealers. The company has said it is looking to sign anther company to supply that info, but no announcement has yet been made.

As for product, Suzuki hasn’t had a new one since the Kizashi mid-size sedan went on sale in 2009.

If there is any positive news it’s the buy outs that Suzuki offered underperforming dealers last year, paying $50,000 to 50 dealers to close up shop. Many lower performing dealers weren’t committed to the brand at all, suggests the report, instead using the franchise as a way to support large used car lots.

With many of those dealers now gone, Suzuki may be able to rebuild its U.S. operations. Then again, with no new product, shrinking sales and ominous actions by key executives, the brand’s future has never been more in doubt.

[Source: Automotive News]