American Suzuki Files Chapter 11 Bankruptcy

by San Antonio Attorney

Suzuki made an announcement on Monday that its American unit will file for Chapter 11 bankruptcy and it will stop selling vehicles in the country.

The decision to discontinue its business in the United States is a reasonable move to concentrate on its strong points, according to Koji Endo, an automotive analyst with Advanced Research Japan. The strong currency of Japan also made it hard to make profit in the U.S, he said.

Back home, Suzuki is a leading manufacturer of small cars that benefit from preferential tax treatment because it meets the limitations on engine size, horsepower, length, and width. The category of small cars in Japan is called kei, which was created during its lean postwar years so that ordinary citizens could afford to buy cars. The small cars of Suzuki have remained popular today as an economical choice suitable for driving the claustrophobic roads in Japan.

The American Suzuki Motor Corporation is the exclusive distributor of Suzuki cars in the country. In its bankruptcy filing, it stated $346 million in liabilities. The car maker said that a variety of issues resulted in its decision to close its unit in the United States, which includes poor sales volumes, a small number of vehicle models in its selection and foreign exchange rates factor.

The auto maker also blamed the expensive costs related to maintaining a distribution system in a continental country and the increasing costs of meeting the federal and state regulatory requirements.

General Motors has sold its stake in Suzuki, as the Japanese car maker pulled out from their joint venture to manufacture cars in Ontario, Canada.

After that, the sales of Suzuki vehicles in the United States have dropped. From January to October this year, only 21,000 of its vehicles were sold. A flourishing collaboration with Volkswagen also fell through.

According to experts, Suzuki is probably planning to focus its managerial resources on fortifying its hold on markets such as India, where it has been struck by worker problems in the past few months.

– When your debts pile up faster than your ability to repay them, you can work with creditors through the courts to fix the problem. Bankruptcy is not normally the first solution, but it usually becomes the reasonable option when facing insistent bill collectors. A San Antonio Bankruptcy can help you file for Chapter 11 bankruptcy to give you time to restructure your finances.

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