Social Media

Suzuki exec: Dealer purge related to performance

GS500FAA

March 21, 2013
Filed under News, Top Stories

American Suzuki Motor Corp. will drop 98 dealers from its U.S. motorcycle and ATV dealer network as part of its Chapter 11 restructuring, a Suzuki official told Powersports Business on Thursday.

“We’re not cutting 200 dealers. Approximately 90 percent of our dealers received a letter that their contract has been assumed by ASMC,” Larry Vandiver, ASMC sales and marketing senior director, said. “It’s all part of our restructuring under Chapter 11 to secure long-term growth of Suzuki.”

All Suzuki dealers should have received their letter of acceptance or rejection, with no further notices being mailed. Rejected dealers have received a buyout amount that is in accordance with their Chapter 11 claim, he said. Suzuki will repurchase all of its existing new products as well as parts from the rejected dealers, with a completion goal of March 31.

Vandiver said that the 98 dealers that were rejected comprised 2.5 percent of the company’s retail sales for the past 12 months. Over the past three years, they’ve accounted for 2.8 percent of Suzuki’s retail sales.

The reduction will leave its U.S. dealer network at 832, Vandiver said.

“It’s a reduction at this time, but Suzuki will be looking at various areas across the U.S. to establish new dealers,” he said.

For specific challenges such as store signage that rejected dealers will face, Vandiver said the company “will be reasonable. We will work with each individual. If there’s a problem with getting signage removed, we’ll work together.”

The cuts were based on performance, not geography, Vandiver said.

“Moving forward over 97 percent of our retail potential remains with Suzuki, and in our world, retail is what matters,” he said. “Sales was only one part of performance. Service, parts, advertising and a lot of different elements also were considered. It was part of a process of looking at overall support of the product.”

Comments

9 Responses to “Suzuki exec: Dealer purge related to performance”

  1. John Paulsen on March 21st, 2013 7:57 pm

    I know a dealer that placed 9th out of 47 dealers in their “Suzuki Club” distirct standings and was terminated, so its not on performance being in the bottom 2% as they state

    [Reply]

    Michelle Desmond Reply:

    I wonder if there are ANY dealers available in that quarter then?

    [Reply]

    John Paulsen Reply:

    All the dealers in the district standings were established dealers for a significant period of time, This dealer had been in operation for 40+ years!the dealer closed not only placed 9th in the district placed in the top 5 in the region on one of the sales categories assessed

    [Reply]

    Michelle Desmond Reply:

    Horrible state of affairs It is hard to believe they have so little respect for their dealers, especially the long timers. This economy really has hit everyone hard.

  2. troy snead on March 22nd, 2013 9:06 am

    The dealers stuck with Suzuki through all the corporate missteps, such as not building a Side X Side type vehicle and now they are throwing 98 dealers under the bus! From a manufacturers viewpoint, I would take the 2.8 % of the retail that Suzuki is going to miss by closing these dealers. I personally do not see how they can give up any retail. As far as signing up new dealers, there will be resistance to taking on the brand in this environment . We did not receive a termination letter but are considering dropping the line.

    [Reply]

  3. rb on March 22nd, 2013 9:42 am

    Thanks for getting this out, the suzuki reps have been very closed lip about this. There were two levels of buyout, either you got $10,000 or $5000 to get out of the way. Suzuki apparently is going for dealers in bigger towns, and if that is the way they want to take care of their existing customers, i’m sure that their market share will continue to fall. I’m one of the 98 that was cut, and the biggest problem I see is from the beginning when they filed that if there was a chance that some of the dealers were getting cut when this was over, then this might not be so hard. The reps were told to say “don’t worry, this bankruptcy isn’t going to affect anything with the motorcycles”… So we go ahead and budget and make plans for shows and order the units… Now we get less than 2 weeks to finish this relationship out????? Say all you want about the dealers being cut are less than 3% of your sales, I find that hard to believe… I wish you luck in the future but I think you and your remaining dealers are headed towards another financial meltdown in less than 5 years with your current product offering and given the state of the economy for the next 5 years… This BK has been in the plans for a while… good luck to all of you that are left.

    [Reply]

  4. David Martin on March 24th, 2013 8:20 am

    @John Paulsen. Hi guys, a comment from the UK. Suzuki UK did a similar thing some 2 years ago – 30% of the dealer network gone…but Suzuki USA didn’t say it was cutting out dealers that were in the bottom 2%. What they said was – “the 98 dealers that were rejected comprised 2.5 percent of the company’s retail sales for the past 12 months” – in other words it was a collective comment; one of those 98 dealers could have done a bundle of sales and the other 97 could have done nothing. It’s the old Pareto distribution curve, the 80:20 rule. 20% of your dealers will do 80% of your sales. Yet the costs of looking after the 80% not-so-good dealers is 4 times the cost of looking after the 20% good dealers. So, think lucky they aren’t getting rid of 80% of the network.

    If your (US) big-bike market is anything like ours in the UK, then it has been slaughtere din the past 4 years. New, over 600cc registrations are down 70% on the past 4 years here – and for most of Europe as well. I’m just surprised Honda, Yamaha etal haven’t done it as well….

    [Reply]

  5. Tim Kern on April 1st, 2013 4:25 pm

    Yup, my dealer (3 miles away) got his ticket yanked;
    now, the nearest Suzuki dealer is 45 minutes away. Translated into gas money, that adds about twelve bucks to my round trip. Guess I won’t be bringing friends there to have a look around, and I’ll probably buy more parts on line.

    I’m not a dealer; I’m a customer. In my garage are a ’73 TS90,
    ’76 GS750A, ’81 GS450, and two (’96 and ’97) RF900Rs
    that all feel like orphans.

    [Reply]

  6. Steve Biegler on April 5th, 2013 9:40 am

    Well there you have it. Parent company goes BK so it can get rid of the dealers, both auto and POWERSPORTS it deems unworthy. Then forms a “NEW COMPANY” run by the same people out of the same offices selling the same product. Sound like something you have heard of before? Can you say Chrysler / GM? The fact that something like this happens is just wrong. The parent company has money to start another corporation but not run the old one? Our government started a scary trend when they scripted the 09′ auto fiasco when it comes to the dealer body, Dealers are independent businesses that consider a franchise an asset and it should be treated as such. Chrysler dealers got ZERO compensation and were left with all their parts, tools and vehicles, to bad they are your inventory, do with it what ever you can. The Suzuki dealers were LUCKY to get what they did, if you can call that luck. How do I know these things? I was one of the UNLUCKY Jeep dealers

    [Reply]

Feel free to leave a comment...
and oh, if you want a pic to show with your comment, go get a gravatar!