* American Suzuki Motor to file for Chapter 11 protection
* Strong yen, small-car lineup hurt U.S. sales
* Focus in U.S. will be on motorcycles, ATVs, boats
TOKYO, Nov 6 Japan's Suzuki Motor Corp
will pull the plug on its unprofitable automobile sales business
in the United States after nearly three decades, hurt by a
strong yen and a limited choice of vehicles that failed to
Suzuki said on Tuesday it would use a Chapter 11 bankruptcy
filing by its U.S. subsidiary in federal court in California to
shut down the auto business and to focus instead on sales of
motorcycles, All-Terrain Vehicles (ATV) and boats.
The departure of Suzuki ends a 27-year effort to gain
traction in the world's second-largest auto market and should
most benefit Kia Motor and Nissan Motor,
the two brands that car shoppers most compared to Suzuki,
according to car shopping website Edmunds.com.
The bankruptcy could allow Japan's No.4 automaker to step
away from its contractual responsibilities to the more than 200
dealers who maintain franchises, much as General Motors
and Chrysler were able to drop dealerships in their 2009
Suzuki models did not catch on in the United States, and the
company suffered from a lack of investment in new vehicles. It
also struggled from the strong yen that makes it more expensive
to export products from Japan.
It sold 21,188 vehicles in the United States through October
this year, a 5 percent drop from the previous year at a time
when the overall market was up by 14 percent. That made the
brand the second worst-selling mainstream brand, behind the
Suzuki, which had marketed the Kizashi sedan and the Grand
Vitara SUV in the United States, said it would continue to honor
warranties during the bankruptcy and did not see the need for
outside financing during the restructuring.
American Suzuki Motor Corp, the sole distributor of Suzuki
v ehicles in the continental United States, will file for
bankruptcy with $346 million in debt, of which $173 million is
owed to Suzuki group companies, the company said.
The Japanese parent company plans to buy the motorcycle, ATV
and outboard engine operations out of bankruptcy and shift its
auto business to service existing vehicles on the road. The new
U.S. operating unit plans to keep the American Suzuki name, it
Suzuki's failed tie-up with Volkswagen on
vehicle development had raised questions about its commitment to
the U.S. market and whether it would be able to invest in a
revamped product line-up months before Tuesday's announcement.
Shares of Suzuki sunk in early morning trade but were up
0.38 percent at 1842 yen as of 11:01 a.m. (0201 GMT), slightly
outperforming the Nikkei index that was down 0.3