Suzuki Motors said late Monday night that they will be filing for Chapter 11 bankruptcy and that the company will also officially be getting out of the car business in the U.S.
The company claims the bankruptcy had nothing to do with the decision to stop making cars for the U.S. The main reason for folding the company instead has been related to an unfavorable foreign exchange rates, slow vehicle sale numbers, and high costs due to U.S. regulatory requirements according to the Associated Press.
The decision came to no surprise as the company only sold a less than 22,000 vehicles this year so far. The number is down 5 percent compared to a year ago according to USA Today. The company just couldn't catch on in the U.S. car market as they hoped when they started selling cars in the U.S. over 27 years ago.
American Suzuki Motor Co. will file bankruptcy with over $346 million in debt, and of that $173 is owed to Suzuki group companies according to Reuters.
The company now opens the market to other companies like Nissan Motors and Kia Motors, Suzuki's biggest competitors according to Reuters. The bankruptcy would let Suzuki step away from its contracts with over 200 franchise dealers in the U.S. just like Chrysler and General Motors were able to do in 2009 when they filed for bankruptcy.
The Grand Vitara SUV and Kizashi sedan were heavily advertised in the U.S. but sales came up drastically short. The Japanese automaker will still honor warranties during the bankruptcy which is good news for those who wish to return cars.
The Japanese based company will buy the American company and plans to continue service for Suzuki cars currently on the road while putting more of a focus strictly on all-terrain vehicles, engines for boats, and motorcycles according to USA Today.
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