Suzuki cuts marketing costs while sales, dealerships decrease

Article by Christian Andrei, on April 17, 2012

Suzuki is cutting its marketing while its sales and dealerships are decreasing, insiders revealed. There were many signals that the struggling company is shrinking. For one, sales of Suzuki were down by 2% to only 6,561 units through March despite being in a market up by 13%. Moreover, the company did not participate in this year's Los Angeles and Detroit car shows.

It also shelved activities through social media on Facebook and Twitter two months ago. In January, top U.S. product marketing and planning executive Steve Younan left and will not be replaced.

Since 2009, there were no national TV commercials aired. Also in January, the company discontinued from receiving J.D. Power and Associates' customer satisfaction data, which help monitor dealer performance.

Automotive News has obtained a memo stating that another vendor will replace Power. However, no successor has surfaced according to sources. Furthermore, the dealer body is still shrinking.

In 2011, the company dropped 32 franchises, which is almost 12% of the total. Also, the number of Suzuki franchises in the United States has declined annually since 2005. 

The strategy of Suzuki has become "very much focused on short-term profitability," according to an insider familiar with the company's latest cost-cutting activities.

The insider, who requested anonymity, disclosed that the company is limiting its future in the United States. None of the people at American Suzuki wants to discuss about the company's dilemmas and their solutions.

However, the Suzuki dealers are feeling the challenges. Former dealer Bill Kay related that at one point, he "really thought" that the company was going to support, "but it was kind of like a downward spiral -- no sales, no money, no advertising." Kay dropped his Suzuki franchise last summer despite having a vacant Chrysler dealership in suburban Chicago available for Suzuki.

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