Japanese automaker Suzuki Motor Corp. no longer plans to supply Hawaii with new cars following a reorganization of its U.S. subsidiary in California.
Brea, Calif.-based American Suzuki Motor Corp. filed Chapter 11 bankruptcy Monday and said it will wind down auto sales on the mainland.
Even though Hawaii’s Suzuki dealer, Servco Pacific Inc., receives its cars from Japan, the supply is expected to cease, according to Paul Lam, Servco marketing manager and spokesman.
Lam said Servco’s Suzuki Hawaii dealerships will follow the wind-down in sales of American Suzuki.
Servco will honor all warranties and continue to provide Suzuki parts and service. The company encouraged customers with questions to call 839-2273.
Servco sells Suzuki automobiles through its Lexus dealership on Maui and its Toyota dealerships on Oahu, Kauai and Hawaii island. The company cited a Polk study stating that Suzuki automobiles account for 0.3 percent of total vehicle sales in Hawaii.
Servco retails Toyota, Lexus, Scion, Subaru, Suzuki and Chevrolet brands in Hawaii. The firm also owns five automotive dealerships in Australia.
American Suzuki was established in 1963, and markets its vehicles through a network of about 250 dealerships.
American Suzuki recently reported selling 2,023 vehicles in October, a 5 percent gain from the same month last year. The increase was aided by the company’s updated Grand Vitara sport utility vehicle and SX4 crossover. For the recent fiscal year ended in March, vehicle sales were down 2 percent to 6,561.
Suzuki Motor said sales projections, market trends, exchange rates and U.S. environmental and safety regulations were factors that contributed to a conclusion that its U.S. subsidiary can’t be profitable selling cars.
However, the Chapter 11 reorganization is intended to allow continued operation of American Suzuki’s motorcycle, all-terrain vehicle and marine outboard engine divisions.
Suzuki Motor reported that its U.S. subsidiary earned a $135 million profit in the fiscal year that ended March 2010, but swung to a $79 million loss the following year and a $16 million loss in the most recent fiscal year.
The Japanese-based firm said its U.S. subsidiary owes creditors about $346 million, of which about $173 million is owed to Suzuki Motor and other affiliates.
