American Suzuki Motor Corp. surprised dealers at the NADA convention by reversing a highly criticized marketing program.
On Jan. 1, Suzuki reduced its contribution to dealer advertising co-ops to $300 per dealership but increased spending on national and regional advertising.
At the make meeting, the company announced it is bumping its co-op contribution to $500 per dealership, 'almost to prior levels,' said Rick Kline, chairman of the Suzuki National Dealer Advisory Board. He would not say exactly what those levels were.
That means Suzuki now pays 50 cents for every $1 that dealers contribute up to $500.
'It put the dealers in a position where they were afraid to advertise because they'd have to spend too much money to get the same advertising voice that they would have had prior,' he said after the meeting. 'It's kind of refreshing to see a manufacturer that listened and responded quickly.'
Bonus is back
Suzuki also reinstated an $800 bonus it gives dealers when they reach a monthly sales goal, which varies by dealership.
Starting Jan. 1, dealers received only $300 for every car sold past that goal.
Suzuki has no national dealer advertising council, but Kline says he will raise the issue with factory officials in April at the next meeting of the Suzuki dealer advisory board. He wants the board to create a subcommittee giving dealers a say in national and regional advertising.
'We need to be brought in earlier in the process,' he said.
A peek at the future
Dealers were shown the Esteem replacement. The Japanese-looking, tall sport wagon will keep Suzuki headed in the right direction, said Kline, president of the six-franchise Kline Auto World in Maplewood, Minn.
The wagon, which may not be called the Esteem, will be shown as a concept vehicle at the New York auto show in April. Dealers will see the first production version at their annual meeting in September in Las Vegas.
The vehicle is scheduled to be in dealerships in late December or early January, said Don Hicks of Shortline Automotive Inc. (Subaru-Hyundai-Suzuki) in Aurora, Colo.
Dealers were not told how many units they will get.
Suzuki, which shares the Chevrolet Tracker platform for the Vitara and Grand Vitara, will not share the new Esteem with General Motors, President Rick Suzuki assured dealers.
The XL-7 full-sized sport-utility, released in December, also will not move to a GM platform, he said.
Suzuki now gets to catch up in a couple of areas that will improve customer satisfaction, Hicks said.
The company announced at the meeting that it will add a roadside assistance program this spring, using the American Automobile Association, which also is GM's service provider.
Suzuki executives also told dealers the company likely will expand its warranty from the current coverage of three years or 36,000 miles, bumper to bumper, to five years and either 50,000 or 60,000 miles, bumper to bumper. Hicks said he expects that to begin in September.
Suzuki added 100 dealers last year, bringing its total to 400.
The company plans to add 50 more this year, said Cam Smith Arnold, director of corporate brand marketing and communications for Suzuki.
The company sold 60,845 units in the United States last year, up 22 percent from 1999.