American Suzuki Motor Corporation (“ASMC”) Announces Restructuring and Realignment to Focus on Motorcycles/ATV and Marine

  American Suzuki Motor Corporation (“ASMC”) Announces Restructuring and
  Realignment to Focus on Motorcycles/ATV and Marine Divisions

  ASMC to wind down and discontinue new automobile sales in continental U.S.

   Consumers will be protected and all warranties will continue to be fully

Business Wire

BREA, Calif. -- November 05, 2012

American Suzuki Motor Corporation (“ASMC” or “the Company”), the sole
distributor in the continental United States of Suzuki Motor Corporation
(“SMC”) automobiles, motorcycles, all-terrain vehicles and marine outboard
engines, today announced that it plans to realign its business to focus on the
long-term growth of its Motorcycles/ATV and Marine divisions. Following a
thorough review of its current position and future opportunities in the U.S.
automotive market, ASMC will wind down and discontinue new automobile sales in
the continental U.S. The Company has determined the best path to achieve this
realignment in an efficient and orderly manner is to restructure its
operations under chapter 11. The case will be filed in the United States
Bankruptcy Court, Central District of California in Santa Ana.

Consistent with ASMC’s long history of standing by its products, owners of
Suzuki automobiles will be protected. All warranties will continue to be fully
honored and automobile parts and service will be provided to consumers without
interruption through ASMC’s parts and service dealer network.

ASMC remains firmly committed to Motorcycles/ATV and Marine products, and
these divisions are competitively positioned in their respective markets,
allowing for long-term growth as economic conditions improve. The realignment
is intended to better position ASMC for long-term success and is a return to
the Company’s roots in the U.S. market, which began with motorcycles and has
grown to include ATV and marine products. ASMC remains very proud of its high
quality, high performance motorcycle, ATV and Marine products. The Company
will continue to bring ASMC products to market, including its full lineup of
sportbike, cruiser, touring, scooter, dualsport, motocross, off-road
motorcycles and KingQuad ATV line, as well as its flagship DF300AP,
state-of-the-art DF20A, and DF15A, among other models. Additionally, ASMC is
working to further build its market share through continued investment in
additional support for dealers through marketing and advertising activities
and sales promotion. Suzuki will continue to have a strong presence as a
sponsor of teams in supercross, outdoor motocross and road racing.

In evaluating its position in the highly regulated and competitive U.S.
automotive industry, ASMC determined that its Automotive division was facing a
number of serious challenges. These challenges include low sales volumes, a
limited number of models in its line-up, unfavorable foreign exchange rates,
the high costs associated with growing and maintaining an automotive
distribution system in the continental U.S. and the disproportionally high and
increasing costs associated with stringent state and federal regulatory
requirements unique to the U.S. market. While the decision to discontinue new
automobile sales in the U.S. was difficult to make, today’s actions were
inevitable under these circumstances. ASMC is dedicated to honoring its
commitments to Automotive customers through and after the wind down of new
automobile sales in the continental U.S.

An Orderly Process to Serve Consumers

ASMC intends to work within its current U.S. Automotive dealer network to help
structure a smooth transition from new automobile sales to exclusively parts
and service operations, or, in some instances, an orderly wind down of
dealership operations. ASMC intends to market and sell its remaining U.S.
automobile inventory through its Automotive dealer network. Through and after
the restructuring, all warranties will be fully honored and automobile parts
and services will be provided to consumers through the dealer network. ASMC
intends to honor any automobile buyback agreements that are currently in place
with financial institutions.

As part of its chapter 11 filings, ASMC will submit a proposed Plan of
Reorganization and Disclosure Statement that specifies how the Motorcycle, ATV
and Marine divisions will be maintained and enhanced, and how its relationship
with Automotive dealers will be largely transitioned to support consumers and
dealers through continued parts and service operations. SMC or its nominee
intends to purchase ASMC’s Motorcycle, ATV and Marine businesses, as well as
the Automotive service operation responsible for parts and warranties, through
a new U.S. subsidiary that will retain the ASMC brand name.

ASMC believes it has sufficient cash on hand to operate its businesses during
the restructuring. If necessary, ASMC will request permission from the Court
to borrow additional funds from SMC needed during the restructuring.

Honoring Commitments

ASMC intends to operate its Motorcycles/ATV and Marine businesses as usual and
is dedicated to completing the realignment process as smoothly and efficiently
as possible. ASMC will continue to fully stand behind all of its products and
honor all warranties from these divisions. ASMC is working with GE Capital’s
Retail Finance and Commercial Distribution Finance businesses to continue
providing motorcycles and ATV consumer financing programs and motorcycle, ATV
and marine dealer inventory financing respectively. The Company expects
existing agreements with other dealer and consumer financing providers to
continue as well.

ASMC has filed a series of first day motions requesting approval to continue
paying employee wages and benefits in the ordinary course, offering dealer
incentives and payments under customer warranties. ASMC also expects to pay
vendors in the normal course of business for goods and services delivered on
or after its November 5, 2012 filing. Payments for goods received before
ASMC’s November 5, 2012 filing will be made in accordance with the chapter 11

SMC, the 100 percent interest holder in ASMC, is not a debtor in the chapter
11 filing.

ASMC’s legal advisor on the restructuring is Pachulski Stang Ziehl & Jones
LLP, and its financial advisor is FTI Consulting, Inc. Nelson Mullins Riley &
Scarborough LLP is serving as special counsel on automobile dealer and
industry issues. Further, ASMC has proposed the appointment of M. Freddie
Reiss, Senior Managing Director at FTI Consulting, as Chief Restructuring
Officer, and has also added two independent Board members to assist it through
this period.

Additional information regarding ASMC’s business realignment can be found at
the Company’s website,, or via an information hotline at


Media Contacts:
Rachel Rosenblatt
FTI Consulting
Kal Goldberg
FTI Consulting
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