• Sign in to follow this  
    Followers 0

    Suzuki Dealers Are Stuck Between A Rock And A Hard Place


    William Maley

    Staff Writer - CheersandGears.com

    November 13, 2012

    The news of Suzuki automobiles leaving the U.S. has left their dealers with a choice, either take a cash settlement or take Suzuki to court.

    Last week, American Suzuki Motor Corporation was authorized by a U.S. Bankruptcy Court to borrow $45 million dollars as part of a settlement with dealers. The settlement would give dealers a cash settlement, and a new contract giving the dealers the rights to operate as parts and service centers for Suzuki vehicles if the dealers voluntary surrender their agreements with Suzuki.

    There’s two problems with the settlement. For one, the settlements to be paid out, Suzuki will use dealership sales, rent, vehicles in inventory, and investment in facilities to come up with a amount. This arrangement would cause dealers who didn’t sell that many Suzuki vehicles to get a small amount. Also, dealers who agree with the settlement also agree not to take legal action against Suzuki.

    Now, Suzuki dealers can decline the settlement and take the company to court to fight for what they are entitled to thanks to state franchise laws. The franchise laws make Suzuki buyback the dealer’s inventory of new vehicles and parts, and provide compensation for for rent, facility, and other costs.

    There’s a problem with this as well because a dealer’s claim could be just worth pennies on the dollar, especially after Suzuki pays its higher-priority creditors.

    "If Suzuki had chosen to exit the market and terminate the franchise agreements, it would have been subject to state franchise termination assistance provisions such as buying back vehicle inventory, parts, tools and rent on the dealership facility," said James Moors, NADA's director of franchising and state law.

    "NADA would be concerned if Suzuki is attempting to use the bankruptcy process to avoid its obligations to its dealers. NADA is reviewing this proposal and believes that Suzuki dealers should not receive less than what they are entitled to under their franchise agreements and applicable state law," Moors went onto say.

    Source: Automotive News (Subscription Required), 2

    William Maley is a staff writer for Cheers & Gears. He can be reached at william.maley@cheersandgears.com or you can follow him on twitter at @realmudmonster.

    Related Stories:

    Suzuki Vehicles Bid Adieu, Files Chapter 11

    0


      Report Article
    Sign in to follow this  
    Followers 0


    User Feedback


    I feel bad the the Suzuki guys here in Columbus, thgey were fighting the good fight and trying to make a go of it with like zero support....

    Wonder how cheaply you can buy a Kisashi right now?

    You say Kisashi

    I say Geisundeit

    :P

    0

    Share this comment


    Link to comment
    Share on other sites

    where i wuz at sold a few kizashis for a few ticks under 17 for an AWD S model.

    the loyal suzuki customers came out of the woodwork to snatch up the deals when the prices fell.

    if there is a dealer with a stick shift kizashi, you will get that dirt cheap. probably an S base stick shift for 14 or 15......a GTS stick if you can find one for maybe 17-18.....

    0

    Share this comment


    Link to comment
    Share on other sites


    Your content will need to be approved by a moderator

    Guest
    You are commenting as a guest. If you have an account, please sign in.
    Add a comment...

    ×   You have pasted content with formatting.   Remove formatting

    ×   Your link has been automatically embedded.   Display as a link instead

    Loading...



  • Popular Stories

  • Similar Content

    • By William Maley
      Cadillac is offering 400 of its smallest dealers a buyout if they don't want to be part of the ambitious and contentious Project Pinnacle.
      Automotive News reports the offers will range from $100,000 to $180,000. The dealers eligible for the buyout sold less than 50 new Cadillac models in 2015. While the 400 dealers make up 43 percent of Cadillac's total number of dealers in the U.S. (around 925), this group only made up 9 percent of total sales last year.
      Cadillac President Johan de Nysschen said the buyouts is to give those an alternative who don't want to forward with the new program.
      “This is going to be a long, arduous and challenging journey and certainly not one for the faint-hearted. Some people may choose to make life a little easier than what lies ahead,” said de Nysschen.
      de Nysschen did say while Cadillac has too many dealers compared to their rivals, the buyout program isn't meant to be seen as a way to get rid of low-volume dealers. 
      Project Pinnacle is a new incentive program that will separate dealers into five tiers based on sales volume. Each tier offers a varying level of customer perk along with different requirements for services and facilities. For example, small stores cannot stock vehicles on site. Instead, they would offer a virtual showroom for customers to explore and order a vehicle. This program has gotten backlash from dealer groups, saying it would violate franchise laws and be unfair to the smaller dealers. 
      Those who have been offered the buyout have until November 21st to either take it or move forward with Project Pinnacle, which is expected to begin January 1st.
      Source: Automotive News (Subscription Required)
       

      View full article
    • By William Maley
      Cadillac is offering 400 of its smallest dealers a buyout if they don't want to be part of the ambitious and contentious Project Pinnacle.
      Automotive News reports the offers will range from $100,000 to $180,000. The dealers eligible for the buyout sold less than 50 new Cadillac models in 2015. While the 400 dealers make up 43 percent of Cadillac's total number of dealers in the U.S. (around 925), this group only made up 9 percent of total sales last year.
      Cadillac President Johan de Nysschen said the buyouts is to give those an alternative who don't want to forward with the new program.
      “This is going to be a long, arduous and challenging journey and certainly not one for the faint-hearted. Some people may choose to make life a little easier than what lies ahead,” said de Nysschen.
      de Nysschen did say while Cadillac has too many dealers compared to their rivals, the buyout program isn't meant to be seen as a way to get rid of low-volume dealers. 
      Project Pinnacle is a new incentive program that will separate dealers into five tiers based on sales volume. Each tier offers a varying level of customer perk along with different requirements for services and facilities. For example, small stores cannot stock vehicles on site. Instead, they would offer a virtual showroom for customers to explore and order a vehicle. This program has gotten backlash from dealer groups, saying it would violate franchise laws and be unfair to the smaller dealers. 
      Those who have been offered the buyout have until November 21st to either take it or move forward with Project Pinnacle, which is expected to begin January 1st.
      Source: Automotive News (Subscription Required)
       
    • By William Maley
      Volkswagen and their U.S. dealers have had a tense relationship since the diesel emission scandal broke. From the departure of Michael Horn to dealer meetings where tough questions were being asked to Volkswagen executives. But it seems some progress is being made on repairing it. 
      In a statement released today, Volkswagen announced they have reached an “agreement in principle” with its dealers over compensation for losses due to the diesel emission scandal. According to Automotive News, the preliminary agreement will see dealers get a cash payout within 18 months from a settlement fund. The payout for each dealer will be determined by a formula that is currently being worked out. Volkswagen has also agreed to purchase "“unfixable, used” diesel vehicles from dealer inventory under the same terms as buyback offers for consumers".
      This settlement comes after a group of Volkswagen dealers filed a lawsuit against the German automaker back in April.
      The settlement is still being finalized and will need to get the approval of U.S. District Judge Charles Breyer in San Francisco before anything else can happen. Volkswagen says they hope to have everything finalized by September.
      “We believe this agreement in principle with Volkswagen dealers is a very important step in our commitment to making things right for all our stakeholders in the United States,” said Hinrich J. Woebcken, CEO of the North American Region, Volkswagen in a statement.
      Source: Automotive News (Subscription Required), Volkswagen
      Press Release is on Page 2
      Volkswagen and VW-Branded Franchise Dealers in the U.S. Reach Agreement in Principle to Resolve Diesel Litigation
      Herndon, VA - August 25, 2016 - Volkswagen Group of America, Inc. (“Volkswagen”) today announced it has reached an agreement in principle to resolve the claims of VW-branded franchise dealers in the United States relating to TDI vehicles affected by the diesel matter and other matters asserted concerning the value of the franchise. Volkswagen has agreed to make cash payments and provide additional benefits to the dealers to resolve alleged past, current and future claims of losses in franchise value. Volkswagen and the dealers’ counsel will now work to finalize details of the proposed settlement, including how to apportion payments to dealers in the appropriate manner.
      Details of the agreement in principle are still under discussion and are expected to be finalized at the end of September. Any proposed agreement will become effective only after approval by the Court, and the parties have agreed to keep further terms confidential as they work to finalize the agreement. Under the agreement, Volkswagen will consent to the certification – for settlement purposes only – of a class of VW-branded franchise dealers in the United States as of an agreed date. 
      “We believe this agreement in principle with Volkswagen dealers is a very important step in our commitment to making things right for all our stakeholders in the United States,” said Hinrich J. Woebcken, CEO of the North American Region, Volkswagen. “Our dealers are our partners and we value their ongoing loyalty and passion for the Volkswagen brand. This agreement, when finalized, will strengthen the foundation for our future together and further emphasize our commitment both to our partners and the U.S. market.”
      Steve Berman, Managing Partner of the dealers’ counsel Hagens Berman, said, “Our clients recognized the best solution would be one that not only allows them to recoup lost franchise value and continue to employ thousands of American workers, but one that also charts a strong course for the recovery of the Volkswagen brand in the United States.”  Berman added, “Now that there is a path forward for dealers, they can continue to work proactively to take great care of their customers, who are also VW customers.”
      The plaintiffs filed the initial complaint against Volkswagen on April 6, 2016, in the U.S. District Court for the Northern District of Illinois. The litigation was subsequently transferred to the multidistrict proceedings in the U.S. District Court for the Northern District of California.

      View full article
    • By William Maley
      Volkswagen and their U.S. dealers have had a tense relationship since the diesel emission scandal broke. From the departure of Michael Horn to dealer meetings where tough questions were being asked to Volkswagen executives. But it seems some progress is being made on repairing it. 
      In a statement released today, Volkswagen announced they have reached an “agreement in principle” with its dealers over compensation for losses due to the diesel emission scandal. According to Automotive News, the preliminary agreement will see dealers get a cash payout within 18 months from a settlement fund. The payout for each dealer will be determined by a formula that is currently being worked out. Volkswagen has also agreed to purchase "“unfixable, used” diesel vehicles from dealer inventory under the same terms as buyback offers for consumers".
      This settlement comes after a group of Volkswagen dealers filed a lawsuit against the German automaker back in April.
      The settlement is still being finalized and will need to get the approval of U.S. District Judge Charles Breyer in San Francisco before anything else can happen. Volkswagen says they hope to have everything finalized by September.
      “We believe this agreement in principle with Volkswagen dealers is a very important step in our commitment to making things right for all our stakeholders in the United States,” said Hinrich J. Woebcken, CEO of the North American Region, Volkswagen in a statement.
      Source: Automotive News (Subscription Required), Volkswagen
      Press Release is on Page 2
      Volkswagen and VW-Branded Franchise Dealers in the U.S. Reach Agreement in Principle to Resolve Diesel Litigation
      Herndon, VA - August 25, 2016 - Volkswagen Group of America, Inc. (“Volkswagen”) today announced it has reached an agreement in principle to resolve the claims of VW-branded franchise dealers in the United States relating to TDI vehicles affected by the diesel matter and other matters asserted concerning the value of the franchise. Volkswagen has agreed to make cash payments and provide additional benefits to the dealers to resolve alleged past, current and future claims of losses in franchise value. Volkswagen and the dealers’ counsel will now work to finalize details of the proposed settlement, including how to apportion payments to dealers in the appropriate manner.
      Details of the agreement in principle are still under discussion and are expected to be finalized at the end of September. Any proposed agreement will become effective only after approval by the Court, and the parties have agreed to keep further terms confidential as they work to finalize the agreement. Under the agreement, Volkswagen will consent to the certification – for settlement purposes only – of a class of VW-branded franchise dealers in the United States as of an agreed date. 
      “We believe this agreement in principle with Volkswagen dealers is a very important step in our commitment to making things right for all our stakeholders in the United States,” said Hinrich J. Woebcken, CEO of the North American Region, Volkswagen. “Our dealers are our partners and we value their ongoing loyalty and passion for the Volkswagen brand. This agreement, when finalized, will strengthen the foundation for our future together and further emphasize our commitment both to our partners and the U.S. market.”
      Steve Berman, Managing Partner of the dealers’ counsel Hagens Berman, said, “Our clients recognized the best solution would be one that not only allows them to recoup lost franchise value and continue to employ thousands of American workers, but one that also charts a strong course for the recovery of the Volkswagen brand in the United States.”  Berman added, “Now that there is a path forward for dealers, they can continue to work proactively to take great care of their customers, who are also VW customers.”
      The plaintiffs filed the initial complaint against Volkswagen on April 6, 2016, in the U.S. District Court for the Northern District of Illinois. The litigation was subsequently transferred to the multidistrict proceedings in the U.S. District Court for the Northern District of California.
    • By William Maley
      What is the best way to sell a vehicle? Is it through a dealership or a factory store? For Karma Automotive - the reincarnation of Fisker - plans to do both.
       
      Automotive News reports that by the end of this year, 10 franchised dealerships in key markets around the U.S. and Canada will begin selling the Revero. The dealers picked already sell brands like Bentley, Rolls-Royce, Lamborghini, and Porsche.
       
      "These guys really understand this customer. They get that it's not moving metal and pushing volume like the mass-market guys have to," said Jim Taylor, Karma's chief marketing officer.
       
      Alongside the dealers, Karma will have a few brand experience centers" (aka factory stores) in states allow this type of retail experience. Taylor said the stores would allow Karma to control its brand message, and provide reassurance to the dealers that "it's living up to the same standards it expects of them."
       
      "When you control your own store, you live it every day, so you have to walk the walk, So I think in a good way it puts a lot of pressure on yourself to deliver the same level of performance," said Taylor.
       
      Karma plans on showing the Revero next month.
       
      Source: Automotive News (Subscription Required)
  • Recent Status Updates

  • Who's Online (See full list)