American Suzuki Motor Corp., seeking reorganization under Chapter 11 of the U.S. Bankruptcy Code, said it will wind down its unprofitable U.S. car business.
ASMC, a Brea, Calif., subsidiary of Japanese automaker Suzuki Motor Corp., said it will concentrate on other businesses, including motorcycles, all-terrain vehicles and marine products businesses, the parent company announced on its website.
"When considering its long-term business plan, ASMC recognized that it will be unable to maintain profitability with respect to its automobile marketing business ...," the announcement said.
The company cited economic conditions including the currency exchange rate, market trends, ASMC's projected sales volume and stringent U.S. environmental and safety regulations as reasons for the move.
The company said it recognized its other businesses could remain profitable and increase sales.
It said the Chapter 11 filing would facilitate a transition of the U.S. automobile dealer sales force into a network of authorized service and parts dealers to allow the company to honor warranties.
ASMC was incorporated in August 1963 and as of September of this year had 365 employees.
"SMC has an intention to support ASMC in its restructuring to ensure that ASMC can wind down its automobile marketing business smoothly and ASMC can ensure the continued expansion of sales of Suzuki brand motorcycles, ATV (all-terrain vehicles) and marine products in the United States," Suzuki Motor Corp. said.