Suzuki not planning to offer huge incentives, despite poor sales in the U.S.

Article by Christian Andrei, on August 28, 2012

Even when Suzuki’s automobile sales in North America are just half of its motorcycle sales, the company will not be offering huge incentives, according to Executive Vice President Toshihiro Suzuki, the eldest son of CEO Osamu Suzuki. At the April-June earnings press conference of Suzuki, Toshihiro Suzuki also said that the combined revenues from motorbikes and power products (like outboard motors for boats) equaled revenues from its four-wheeled lineup.

Motorcycle sales in North America exceeded car sales, the only Suzuki market that had done so. Suzuki has higher car sales in the motorbike-loving market of mainland Asia than it does in North America.

There’s also the fact that Suzuki’s car sales in North America are continuing to decline. This is likely a factor in the lukewarm interest that Japanese executives have in the market.

Toshihiro Suzuki was evasive when talking about Suzuki’s strategy in North America, which is regarded by most of his competitors as their key market. He clarified that Suzuki will make minor changes to its existing lineup and so it won’t overstretch itself.

He asserted that Suzuki won’t post a deficit just to sell cars, implying just how much it doesn’t like incentives. What Suzuki wants to do is to work with a sales system that’s “appropriate” for its sales volume.

He explained that the U.S. is a leading market in safety regulation and so by participating, it is able to take in new technologies. Along with Suzuki’s scanty sales in North America, these comments don’t seem very comforting.

In the quarter that ends on June 30, Suzuki reported a wholesale of 6,000 vehicles in North America compared to 12,000 motorcycles. The previous year, wholesale car and truck sales totaled 7,000. It accounts for less than 1% of Suzuki's global auto sales in the quarter.

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