BREA, Calif. – Ninety-seven percent of American Suzuki Motor Corp.’s 219 dealers have accepted the bankrupt company’s terms to halt new-car sales. The final return deadline for ASMC Dealer Settlement Agreements, all of which are subject to Bankruptcy Court approval, is Dec. 28, 2012.
The agreements are part of ASMC’s previously announced restructuring and realignment, and are intended to compensate dealers and enable them to transition uninterrupted from auto sales to provide warranty and service repair work and parts for owners of Suzuki vehicles. Citing court papers, Bloomberg put the amount owed to dealers at about $42 million.
“We are pleased to have reached agreements with all of our top 50 automotive dealers and that the total number of acceptances represents more than 98 percent of the total volume of automobile sales for ASMC in the continental United States,” said M. Freddie Reiss, ASMC’s chief restructuring officer. “We greatly value our relationship with our customers, and it is very important to us that they continue to receive the necessary support from ASMC during and after our restructuring. As these agreements demonstrate, we are working within our current U.S. Automotive dealer network to help structure a smooth transition from new automobile sales to exclusively parts and service operations. Based on dealer acceptances, we continue to believe our restructuring and realignment will be completed in a timely manner.”
As previously announced, ASMC intends to market and sell its remaining U.S. automobile inventory through its automotive dealer network, many of whom, officials said, have expressed interest in continuing to order and receive shipments of Suzuki automobiles as long as they remain available.
The company also continues to provide marketing and incentives to help promote the continued sale of the automobiles remaining in dealer inventory and the pipeline. All automobile warranties will continue to be fully honored, in accordance with their terms, and parts and service will continue to be provided to consumers through ASMC’s parts and service dealer network.
ASMC announced on Nov. 5 that it plans to realign its business to focus on the long-term growth of its motorcycles/ATV and marine divisions and to wind down and discontinue new automobile sales in the continental United States. ASMC determined that the best path to achieve this realignment in an efficient and orderly manner was to restructure its operations under chapter 11. The case was filed in the United States Bankruptcy Court, Central District of California in Santa Ana.