Tag Archive | "Suzuki"

Suzuki’s Divorce From VW to Cost It Up to $3.9 Billion

TOKYO – Suzuki says it will buy back the 19.9 percent stake held by top shareholder Volkswagen Group after an international arbitration court last month ordered the German automaker to sell its holding, reports Automotive News.

The Japanese automaker said it would repurchase on Thursday as many as 122.77 million shares at today’s closing price of 3,842.50 yen, for up to 471.74 billion yen ($3.9 billion).

Suzuki did not say what it planned to do with the stock.

Rather than pursue other partnerships, Suzuki has been urged to focus on its dominant India operations and Maruti subsidiary by Daniel Loeb, whose hedge fund Third Point holds a stake in the automaker.

Loeb has urged the company to cancel the shares that it repurchases and focus on improving value for existing shareholders.

Suzuki and Volkswagen agreed to tie up in December 2009, pledging to cooperate on technology and on expanding in emerging economies, but the alliance soon faltered. Suzuki filed for arbitration in November 2011.

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Suzuki Chairman Says Unclear When Court May Rule on Row with Volkswagen

Suzuki Motor Corp Chairman Osamu Suzuki said it was unclear when an international arbitration court will rule on its 2-1/2 year dispute with Volkswagen AG over their failed partnership, reported Reuters.

Japan’s No.4 automaker by global sales volume filed for international arbitration in November 2011, after Volkswagen refused to sell back a 19.9 percent stake in Suzuki it acquired in January 2010 for 1.7 billion euros ($2.3 billion).

Earlier this month, sources familiar with the matter told Reuters that a London-based arbitration court had wrapped up witness hearings and was expected to issue a ruling before the end of the year.

“It’s unclear,” the 84-year-old chief executive told reporters in Tokyo when asked about the likely timing of a ruling. Pressed on whether the two companies could reach a settlement, he said repeatedly: “We are the ones that took this to court.”

The two automakers agreed on a tie-up in December 2009, vowing to work together on technologies in areas such as hybrid and electric vehicles, and on expanding in emerging economies.

Suzuki later accused its German partner of withholding hybrid technology it had promised to share and demanded the return of the 19.9 percent stake. Volkswagen for its part complained about Suzuki’s purchase of diesel engines from Fiat SpA.

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Suzuki Recalls GM-Made Small Cars for Fire Problem

Via Michigan Live:

DETROIT, MI — Suzuki is recalling more than 184,000 small cars in the U.S. because the steering columns can catch fire.

The recall covers Forenza models from 2004 through 2008 and Reno models from 2005 through 2008. Both vehicles were made for Suzuki by General Motors.

The Japanese automaker says the headlamp switch or daytime running light modules can overheat, melt and catch fire on the left side of the steering column.

The company will notify owners and fix the problem for free. It hasn’t scheduled the repairs yet.

GM on Wednesday recalled 218,000 Chevrolet Aveo subcompact cars for a similar problem as the company continues to review safety issues and issue recalls.

It was GM’s 29th recall this year, bringing its total number of recalled in the U.S. to around 13.8 million.

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Suzuki Buys Out 50 Dealers

About 50 Suzuki dealers have accepted buyout offers from the company in the past five months as part of a plan to cut the brand’s worst-performing stores, Automotive News reported.

Struggling American Suzuki Motor Corp. launched the voluntary program in March to encourage low-volume dealerships to close. The brand now has about 300 dealerships, says Gene Brown, the marketing vice president. That’s down from 354 in March.

Suzuki says it aimed to trim the number of retail outlets to give survivors a better shot at profits through increased per-store sales. U.S. sales topped 100,000 in 2006 and 2007 but fell to 38,689 in 2009 and are off 48 percent so far this year.

Dealers have been hurting. John Voss, who took the buyout, calls his Suzuki store near Dayton, Ohio, “a nonentity.”

Voss says he invested about $250,000 for improvements in his stand-alone store after acquiring the franchise in 2007. But for the past year, he says, he has been selling only four or five new Suzukis a month.

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. Dealerships that participated in the “Suzuki Square” showroom renovation program launched in 2003 were offered $50,000. Stores that did not participate were offered $20,000, Suzuki spokesman Jeff Holland says.

The buyout offers were made to about 150 dealers. The program ended July 31, and Brown says Suzuki has no plans to trim its sales channel further.

“The dealers who have taken the offer were selling on average about two cars per month,” Brown says. “The changes have left us in a better position. Dealer profitability is better, and the profitability of the company is better than last year.”

Per-store sales, not regional coverage, dictated which dealers were selected, he says. In regions where all of Suzuki’s dealerships performed poorly, all dealers were offered buyouts.

That was the case in the southwestern Ohio, where the brand had only three stores servicing Cincinnati and Dayton. Both Voss Suzuki and Dave Arbogast Suzuki in Troy, near Dayton, accepted the Suzuki offer. Arbogast remains a service-only point.

John Voss’ Voss Auto Network includes Chevrolet, Honda, Toyota, BMW, Land Rover, Hyundai and other stores. He says his Suzuki store would be better used as a certified-used-vehicle dealership.

“It’s a shame to let a building of that size sit there and do nothing,” he says. “It was basically doing nothing.”

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