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Automotive News -- November 21, 2012 - 12:01 am ET |
Thought Leadership
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In a silver lining for dealers, U.S. Bankruptcy Court in Santa Ana, Calif., last week gave American Suzuki Motor Corp. permission to carry on with 0 percent financing offers, which could help clear out unsold inventories.
The company's preferred lender is Ally Financial, which provides wholesale and retail financing for U.S. Suzuki dealers under a private label, American Suzuki Financial Services.
American Suzuki needed the court's permission to keep paying Ally for subvented loans. According to Suzuki's consumer Web site, from Nov. 1 through Nov. 30, the company is offering 0 percent financing for 72 months for 2012 models. For 2013 models, it is offering 0 percent loans for 48 months.
American Suzuki filed for Chapter 11 bankruptcy on Nov. 5. The company cited $233 million in assets vs. $346 million in liabilities, according to court records.
The company said in a court filing that it had 220 U.S. dealers but that only about 90, mostly in the Northeast, were selling what the company considered "significant" volumes. "Approximately 130 of the automotive dealers sell fewer than five units per month and others may sell as few as one or two units per month," the company said.
According to the Automotive News Data Center, Suzuki had about 5,500 units in inventory as of Nov. 1, representing a 71-day supply.
Ally spokeswoman Sue Mallino said that despite American Suzuki's bankruptcy filing, there had been no interruption in dealership access to credit from American Suzuki Financial Services.
You can reach Jim Henry at autonews@crain.com.
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