All About Japan Autos

Suzuki is suffering. According to Automotive News, the brand extended 150 buyout offers to its worst performing dealerships. 50 dealers accepted, dropping the number of Suzuki dealerships in the U.S. to about 300.

“The buyout offers were intended to give the least profitable dealers a way out, while helping the remaining dealers to enjoy higher profitability due to increased volume from reduced competition from other dealers,” Left Lane News explains. “Many dealers are currently averaging fewer than five new car sales per month, with the average dealer participating in the buyout program selling just two new cars per month.”

Since 2007, the brand’s best-ever annual sales year, sales have plummeted. In 2007, Suzuki sold over 101,884 vehicles and had 486 dealership franchises. By 2009, the brand had about 400 franchises. The sales report for 2010 remains grim. Left Lane News says Suzuki expects to sell 23,145 vehicles with the 300 remaining dealerships.

Suzuki tried to make the buyout process as rewarding as possible for dealerships that accepted the offers. “American Suzuki offered poor-performing stores a cash payment and pledged to buy back inventory, parts, special tools and signs from dealerships targeted by the program,” Automotive News states. “Dealerships that participated in the ‘Suzuki Square’ showroom renovation program launched in 2003 were offered $50,000.” Suzuki offered stores that didn’t participate in the showroom $20,000.

What do the buyouts mean? There are two possibilities. One possibility is that Suzuki is leaving the U.S. Suzuki disagrees. According to Automotive News, Green Brown, vice president of marketing for American Suzuki Motor Corp, says the dealership buyout program wheedles out suffering dealerships in order to strengthen the remaining dealers. For now, American Suzuki has decided to stick with the U.S. market.

If you’re in the market for a new car, check out the U.S. News rankings of this year’s best cars as well as this month’s best car deals.