American Suzuki Motor Corp. on Monday filed for Chapter 11 bankruptcy protection and said it will cease selling automobiles in the U.S. as part of a plan to restructure its business.
The decision will affect two dealerships in the Indianapolis area—Bob Rohrman’s Indy Suzuki and Used Car Superstore on U.S. 31 on the city’s south side, and the Ray Skillman Westside Auto Mall on West Pike Plaza Road—both of which sell new Suzuki vehicles.
A Bob Rohrman employee who declined to give his name said the dealership likely will remain open and continue to sell used cars. It has about 20 employees, he said.
He said sales had been “picking up” recently, but Suzuki said it is exiting the car business because of slow sales, unfavorable foreign exchange rates and high costs due to U.S. regulatory requirements.
A Ray Skilllman manager couldn't be reached for comment Tuesday morning. Its dealership on the west side also sells Hyundai, Kia, Mitsubishi and Mazda vehicles.
Nationally, Suzuki sold 2,023 vehicles in October, up 5 percent from the same month last year. Its Grand Vitara sport utility vehicle posted a 64-percent jump in sales last month, although American Suzuki did not say how many of them were sold. In May, the last month it provided a breakdown of its sales, it moved 474 Grand Vitaras, while its biggest seller was its SX4 small crossover, of which 1,101 were sold.
In documents filed with the U.S. Bankruptcy Court in the Central District of California, the Brea, Calif.-based company estimated that its debts and liabilities range from at least $100 million to as much as $500 million.
It also said it has between 1,000 and 5,000 creditors.
American Suzuki Motor said it has enough cash to operate during the restructuring and intends to honor all car warranties and buyback agreements. It will work with its car dealerships to help them make the transition into parts-and-service operations. In some cases, the dealerships will be closed, it said.
Once it exits bankruptcy protection, American Suzuki Motor said it will focus on selling Suzuki motorcycles, all-terrain vehicles and marine outboard engines.
The bankruptcy and reorganization are unrelated to its parent Japan-based Suzuki Motor Corp., which intends to buy the American subsidiary's remaining businesses and automotive service operation.
The reorganized company will retain the American Suzuki Motor name, the company said.