American Suzuki Motor Corp. is starting a certified used-vehicle program to showcase its late-model vehicles.
Thomas Carney, Suzuki's director of automotive marketing, says the company is "slow-walking" the program. Suzuki expects to generate a larger supply of used vehicles in the next few years as the automaker builds its retail sales, Carney says.
Suzuki likely will not reach its U.S. sales goal of 100,000 new vehicles this year. It sold 63,898 vehicles in the first 10 months - a 28.2 percent increase over the year-ago period.
Carney says the automaker is strengthening its lease portfolio through American Suzuki Financial Services Corp., the captive finance company it formed in April.
"We want to build the portfolio so we can supply the dealers very methodically as we grow with our sales," Carney says.
Suzuki expects to reduce its fleet business from about 20 percent to 25 percent of its U.S. sales in the first half of 2003 to 8 percent at the end of 2004.
That reduction "has driven the auction price of our used vehicles up anywhere from $200 to $400 per car,'' Carney says.
Those two initiatives will give Suzuki enough vehicles to certify, Carney says. The certified program should strengthen resale values, he adds.
To be certified, Suzuki used vehicles must be no more than 5 model years old and have less than 70,000 miles. They must pass a dealer inspection.
The vehicles are covered by any remaining portion of Suzuki's new-vehicle warranty of seven years or 100,000 miles. Suzuki offers an additional one-year or 12,000-mile bumper-to-bumper warranty on its certified vehicles. Dealers pay about $300 per vehicle for warranty coverage.
Suzuki launched its certified program in August with two dealers. It added six dealers by the end of October.
Jerry Goldstein, owner of Five Star Suzuki in Altoona, Pa., is participating in the certified program. His gross profit per used vehicle has risen from $1,650 to nearly $2,000 since he joined the program in August, he says.
"I don't sell expensive used cars," says Goldstein, who is chairman of Suzuki's dealer advisory council. "Most of my used cars are $10,000, $12,000, $14,000. That increase of $300 per car is very beneficial for me."
Carney says Suzuki expects 50 to 55 of its 527 dealerships to join the certified program by March.
Suzuki sold 11 certified used vehicles through October. By contrast, the industry sold 133,380 certified used vehicles in October, up 11.2 percent from October 2003.
Industrywide certified sales totaled 1,317,531 in the first 10 months, a 5.6 percent increase over the year-ago period.
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