The Breakdown

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Suzuki is ending auto sales in the U.S., distributor declaring bankruptcy

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I've been arguing for a while now that at least one seriously underperforming carmaker is going to exit the U.S. market. October U.S. auto sales gave me an opportunity to revisit this issue and again name the two most likely candidates: Mitsubishi or Suzuki.

Well, Suzuki it is. The company announced Monday that it's ending vehicle sales in the United States. But it's sticking with motorcycle, ATV, and "marine boat sales," Reuters reports. Its U.S. distributor, American Suzuki Motor Corp., plans to declare bankruptcy.

Suzuki has a respectable lineup of vehicles, but it isn't even remotely competitive on sales in the U.S. — it sold barely more than 2,000 cars and trucks in October and ended the month with a 0.2 percent market share. That's almost statistically insignificant and a complete disaster for a mass-market automaker. I haven't been able to confirm it, but I don't think the company has a single remaining dealer in the Los Angeles area. 

Here's what I had to say last year about the prospects of a carmaker leaving the U.S. market, when I was covering the auto industry for CBS Moneywatch before I arrived at KPCC. I've excerpted the Mitsubishi/Suzuki part of the breakdown. Worth noting is that since 2011, Mitsubishi and Suzuki have lost half their then-paltry market share:

Mitsubishi: Less than 1 percent of the market, and trending down. Most prospective customers would be hard-pressed to pick its vehicles out of a lineup. Sales are good in other markets, so Mitsubishi could be headed out -- except that it operates a factory in Illinois.

Suzuki: Sold less than 40,000 vehicles in the U.S. in 2009. Market share could be considered a rounding error at under 0.5 percent. Still, before the quake the company said it was committed to staying. But its small-ish vehicles do far better in developing markets. Also, everyone in the U.S. thinks Suzuki only make motorcycles.

You'd have to say that it's between Mitsubushi and Suzuki, with Suzuki looking like the company that's not long for the states. Making matters worse is the impending arrival of Chinese autos, which will attack the small-vehicle market with a vengeance.

The story doesn't have to have an unhappy ending, however. Suzuki has a recently consolidated dealer network that could be appealing to an automaker that's looking to expand in North America. Volkswagen could take it over. Or a Chinese brand could use it to establish a foothold.

The counterargument is that it's essential to continue to do business in the U.S. once you're started. You know, if you can make it here, you can make it anywhere.

I don't buy it, not when your supply chain has been clobbered and fatter profits outside the mature U.S. market loom. You could say that we'll miss Suzuki when it's gone. But so few people own one of its cars that not very many would notice if it left tomorrow.

Follow Matthew DeBord and the DeBord Report on Twitter. And ask Matt questions at Quora.

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