Japan’s Suzuki yesterday said it would shut down its money-losing car business in the US and file for bankruptcy, citing a strong yen and weak demand for its small cars in the US market.
However, American Suzuki Motor Corp (ASMC), which said it has debts of US$346 million, added that it would continue selling motorcycles, all-terrain vehicles (ATV) and marine products — such as outboard motors — in the country.
Suzuki sold about 26,000 vehicles in the US last year, a fraction of rival Japanese automakers such as Toyota Motor Co, Nissan Motor Co and Honda Motor Co.
ASMC “recognized 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 because of a strong yen and weak demand for its compacts in the US.
The yen, which hit record highs against the US 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 motorcycles, ATVs and marine products.
Warranties on vehicles already sold in the US market would be honored 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 biggest automaker.
Meanwhile, Nissan yesterday slashed its full-year profit target by 20 percent, citing the effect of a strong yen and weakness in the European market and China.