Suzuki seeks to build its 4-wheel credentials
Shout “Hey, check out that Suzuki!” in a crowded parking lot, and most eyes will start scanning for a motorcycle.
Few would be looking for a vehicle such as William Ruiz’s 2007 Suzuki XL7, a $22,000 seven-passenger “crossover” that the Los Angeles resident and mortgage lending supervisor calls “awesome.”
It was awesome enough to make his a two-Suzuki family, as he had previously given up his luxe Saab 9-5 sedan in favor of a sporty Aerio compact for his daily commute.
“I got 18 miles to the gallon with the Saab, and I’m getting about 30 with my Suzuki. I put in a tankful and it lasts a whole week,” said Ruiz, 37, married and the father of three boys.
Koichi Suzuki, president of American Suzuki Motor Corp.’s automotive operations, hopes that contented buyers such as Ruiz will help change any perception that the company does business solely on two wheels.
His intent is not to reduce interest in Suzuki motorcycles but to increase awareness that the company sells compact cars, sport wagons and sport utility vehicles. And that it has been doing so since 1985.
Measured by annual sales growth, Brea-based American Suzuki captured the crown for best-performing Japanese automaker in the U.S. last year. Suzuki’s auto sales rose 23% from 2005 and have climbed 73% since 2003. Juggernaut Toyota Motor Corp., by comparison, registered a year-over-year increase of 12.5% in 2006.
On Tuesday, American Suzuki reported March sales of 11,030, a modest 1.3% bump from a year earlier in an overall market that is slowing, but nonetheless a company record for the month.
Granted, the small-car specialist’s record sales last year of 100,990 vehicles is about what Toyota sells in 15 days. But thanks to an aggressive plan for rolling out new models, and the growing national appetite for smaller, more fuel-efficient cars and trucks, Suzuki is enjoying a sales spurt other automakers might envy.
“Anybody in the industry who’s not paying attention to Suzuki right now is going to be sorry,” said Neal Oddes, director of product research and analysis at market researcher J.D. Power & Associates in Westlake Village.
Power expects Suzuki’s U.S. sales to grow an additional 25% by 2010, said global forecast director Jeff Schuster, who added: “Their new products have been doing very well.”
The company is methodically expanding its offerings, with new compact and mid-size sedans expected this year and a compact pickup, co-developed with Nissan Motor Co., in 2009.
A U.S. version of the Swift, a subcompact three-door hatchback popular in Japan and Europe, is on tap, and Koichi Suzuki said the company aimed to have a gasoline-electric hybrid ready for 2010.
The automaker last year introduced a sport wagon, the SX4, which starts at $14,500 and has a top price of about $18,000. Unlike competing crossover SUVs, it offers all-wheel drive as a standard feature. Demand is high enough that some dealers are asking for premiums over the regular price.
Koichi Suzuki, who is not related to the automaker’s founding family, said the American operation hoped to boost the number of dealers 12%, to about 600, and achieve its next big milestone of 200,000 sales a year.
American Suzuki doesn’t aspire to be a full-line automaker with large pickups, minivans and full-size sedans, he said, but plans instead to upgrade in classes in which it already competes.
“As other companies are looking for smaller cars to sell in the U.S., we are adding bigger and better-equipped models,” the executive said.
That’s expected to help the company hang on to customers who find themselves in need of larger models as their lifestyles dictate.
Ruiz, for example, bought his first Suzuki last year, the 2006 Aerio compact, whose looks, low price and good mileage attracted him. He test-drove the Toyota Prius hybrid and Honda Motor Co.’s new Fit subcompact but rejected them as too expensive.
His experience with the Aerio led him back to the Suzuki dealership when he and his wife, Alba, decided they needed a new family car. Their choice was the XL7, a crossover vehicle that’s built on a car-like platform instead of harsher-riding truck underpinnings.
“It has plenty of room for me, Alba and our three boys. And I can fold down the seats and load up my mountain bike on a Saturday,” he said.
Such buyers give Suzuki a base of more upscale customers, important because they can afford larger and more profitable vehicles as the automaker introduces them into its lineup, said Jim Hossack, an analyst at AutoPacific Inc. in Tustin.
In the past, relatively low prices were buyers’ principal reason for choosing Suzuki, according to the market research firm’s survey data.
Ron Washington, a salesman at Suzuki Motors of Los Angeles, said customers ranged “from people looking for something a step up from a used car to pretty affluent people who have more expensive cars but want something to use around town.”
The downtown dealership gets “a lot of new middle-class folks who are starting to realize the American dream and like Suzuki’s SUVs because they are affordable and have room for their growing families,” he said.
Still, making progress in the crowded U.S. market will require Suzuki to go up against bigger, better-heeled competitors for customers.
Stuart Smith, a Marin County social services worker, said he initially wanted an SX4 but ended up buying a Toyota Matrix when his local Suzuki dealer added a $2,995 markup. In addition, his Toyota dealership “is just around the corner, and the Suzuki dealer’s about 20 miles away, so getting service would be hard.”
Karl Brauer, editor in chief of online automotive information provider Edmunds.com in Santa Monica, credits Suzuki for the improved design and capabilities of its current lineup. But he is less enthusiastic about its long-term prospects.
“They are benefiting from gas price, but they’re not like a Toyota, with a full line of vehicles that protect you in all the market cycles,” Brauer said. “They can continue slow and steady growth, but there’s nothing about their product that makes the future look especially bright.”
Koichi Suzuki acknowledges that the company must continue to push.
“We are not comfortable with where we are in reliability,” he said, despite the company’s improved ratings in recent J.D. Power surveys on initial quality and buyer retention.
And those two-wheelers that made Suzuki’s name and reputation worldwide? The company has started using that rich heritage to promote its cars and SUVs. TV ads that began running late last year show Suzuki motorcycles morphing into the company’s four-wheeled vehicles over the tagline: “Are our cars as much fun as our bikes?”
Leonard Zavala thinks so.
The 52-year-old Alhambra School District worker, a resident of Eastside community City Terrace, had been looking at a late-model Outlander SUV from Mitsubishi Motors Corp. when a new SX4 on the same lot caught his eye last month.
“I really liked its looks,” he said. “And once I test-drove it, I forgot about everything else -- it was mine. And everyone at the school district who sees it says the same thing: ‘It’s really cute.’ ”
