Suzuki to Trim US Powersports Dealership Network

When American Suzuki announced it was shutting down its automobile business, the company said it intended to focus on its powersports operations. It comes as a surprise then to some dealers that Suzuki is not renewing all of its dealership agreements.

According to DealerNews, dealerships received letters this week from American Suzuki notifying them whether their franchise agreements would be renewed with the newly formed Suzuki Motor America. Some dealerships received letters telling them their agreements would not be picked up and they would no longer be authorized Suzuki dealers as of March 31.

“ASMC is assuming certain dealer agreements and other contracts and assigning them to Purchaser, while the majority of ASMC’s remaining contracts will be rejected,” reads a copy of the letter obtained by DealerNews.

PowersportsBusiness reports American Suzuki plans to reduce its current 930-member U.S. powersports dealer network by 100-200 as part of its Chapter 11 reorganization.

Cancelled dealerships have until March 27 to file a claim to receive $10,000 for the annulment of their agreements. Suzuki Motor America would also repurchase its inventory from dealerships.

The timing of the news is especially hard on dealerships. The letters were sent out just at the start of spring when the temperatures begin to rise and motorcyclists are ready to resume riding after a cold winter. Those looking to buy a new Suzuki motorcycle or who want to buy accessories may no longer be able to do so at their usual dealership. Ironically, the March 31 cut-off date falls on the day before the month the American Motorcyclist Association has named “AMA Go Ride!” month.

The original announcement of American Suzuki’s Chapter 11 filing, the company said it “remains firmly committed to Motorcycles/ATV and Marine products, and these divisions are competitively positioned in their respective markets, allowing for long-term growth as economic conditions improve.” Suzuki also said it will seek to increase its market share through “continued investment in additional support for dealers through marketing and advertising activities and sales promotion.” We suppose Suzuki neglected to note the statement meant for just “some” dealers.

[Source: DealerNews, PowersportsBusiness]

By Dennis Chung