Will Suzuki Exit the US Market?

The automotive brand graveyard is littered with many American names. Packard. Plymouth. DeSoto. Saturn. Oldsmobile. Kaiser. AMC. Pontiac. Hudson. Rambler. Scores more can be included and more are likely to follow suit.
But it isn't just the American brands that have died or departed from the US market as several foreign brands have discovered that they, too, have a difficult time making it in the most lucrative, but competitive car market in the world. Renault. Yugo. Citroen. Daihatsu. Peugeot. Alfa Romeo. Isuzu. Tight competition weeds out the weaklings while emboldening the strong players who are eager to step in and step it up.
Declining Suzuki
Suzuki is a Japanese automaker whose fortunes are in decline in the US market. Popular in Japan and in India, the Suzuki brand is more noteworthy for selling motorcycles then they are cars, with its sales in a tailspin the past few years. Despite introducing a quality midsize Kizashi sedan for 2010, Suzuki is finding it difficult to sell more cars in a month than what GM, Toyota, Ford and others sell in a day.
Yes, as recently as 2007, Suzuki routinely sold more than 100,000 vehicles annually, but for 2010 those numbers may fall by two-thirds. This comes as every other automaker puts the deep recession behind it, selling many more cars in 2010 than they did in 2009. But not Suzuki.
Sales Loss
So where does the blame lie for Suzuki's dismal showing? With sales down 60 percent for the first quarter of 2010 those numbers are in stark comparison to the 15 percent increase the industry is seeing for the first quarter. Only Chrysler with sales down by 10 percent for the year is losing customers, but that can be understood considering its bankruptcy collapse, restructuring and aged product line.
And that last notation, aged product line, may have something to do with why Suzuki has lost its mojo.
Aged Models
The Kizashi is new, attractive and decently priced, the lone new model in the Suzuki fleet. But, it also competes against at least two dozen other midsize sedans in the most crowded and competitive segment. Good effort, but when buyers are looking at the Ford Fusion, Toyota Camry, Honda Accord, Mercury Milan, Chevrolet Malibu, Hyundai Sonata and many other models, the Kizashi gets lost in the shuffle.
The Equator is a capable compact pickup truck, but it is sourced from Nissan. Sold as the Frontier by Nissan, few serious truck buyers are looking at Suzuki in the first place, with most preferring to buy directly from Nissan.
The Grand Vitara also operates at a disadvantage. The second generation model was introduced for 2006, had a mid-cycle refresh in 2008, but the style of the crossover is plain and outdated. The Nissan Rogue, Mitsubishi Outlander and Kia Sportage are newer, better equipped and better sellers. The Ford Escape, Honda CR-V and Toyota RAV4 are additional competitors, capable crossovers at that.
The SX4 is the main line of Suzuki vehicles, compact cars and crossovers that should sell well. But, even with all wheel drive available, American car buyers have many other small car choices to choose from including new cars from Honda, Hyundai, Toyota, Chevrolet, Ford and others. Nothing distinctive about the SX4, so why look at Suzuki?
Last Hurrah?
Suzuki's sales are falling through the floor which suggests that the brand isn't long for the US market. India has emerged as the right market for Suzuki cars and with Volkswagen now holding approximately 20 percent of Suzuki's shares, the German automaker may tell its Japanese partner to expend its sources in markets where it is succeeding.
Yes, Suzuki can still reclaim its mojo in America but at what price? It can cost hundreds of millions of dollars to bring out a new model, but with sales under a few thousand units per month this Japanese automaker may find joining Daihatsu and Isuzu in making a US exit is the best strategy for the company.