American Suzuki Motor Corp. has filed for Chapter 11 bankruptcy protection, saying it will cease selling automobiles in the United States as part of a plan to restructure its business.
In documents filed with the U.S. Bankruptcy Court in the Central District of California, the company estimated that its debts and liabilities range from $100 million to as much as $500 million. It also said it has between 1,000 and 5,000 creditors.
American Suzuki said it has enough cash to operate during the restructuring and intends to honor all car warranties and buyback agreements. It will work with its car dealerships to help them transition into parts-and-service operations.
Once it exits bankruptcy protection, American Suzuki said it will focus on selling Suzuki motorcycles, all-terrain vehicles (ATVs) and marine outboard engines.
The company said that it is exiting the car business because of slow sales, unfavorable foreign exchange rates and high costs due to U.S. regulatory requirements.
The bankruptcy and reorganization are unrelated to its parent Japan-based Suzuki Motor Corp., which intends to buy the American subsidiary's remaining businesses and automotive service operation.