LOS ANGELES -- American Suzuki Motor Corp. is offering to buy out its lowest-volume dealers to get them to walk away from their troubled franchises.
But executives insist, despite plunging sales, that Suzuki has no plans to leave the United States. The company says it's courting former Saturn dealers willing to commit to a new franchise.
The buyout program, which will be announced this week, won't be available to all dealers. Suzuki has identified "a few dozen" of its 354 dealerships that it considers to be chronic underachievers and will meet with them to offer terms to close, said Gene Brown, Suzuki's vice president of marketing.
"It's totally voluntary," he said. "We are not going to force anyone to drop the franchise. But it costs them money to stay in business, and it costs us money to keep them in business.
"We're saying we'll help them with costs if they are looking to get out."
Suzuki will help dealers pay to remove signs and will buy back parts, special tools and recent inventory, Brown said.
Chris White, manager of dealer development, is running the program. Dealers will be asked to decide by May 14.
The underperforming dealers Suzuki has identified combined for just 2,500 new Suzukis sold in 2009 -- an average of about five a month. Those franchises usually are dualed with better-known brands and shunted into a dark corner of the showroom.
"If the dealer doesn't want to go, no problem," Brown said. "If they want to keep selling cars, they are free to do that.
"The dealer also has the option to stay a warranty service provider, rather than being a sales point, which is a lower investment for them and us," he said. "We're not yanking the rug out from people like GM and Chrysler did last year."
Suzuki is in trouble in this country. During 2006 and 2007 it broke 100,000 sales, but the brand sold just 38,689 units in 2009. Sales are off an additional 52 percent this year.
A top executive in Japan said he considers the just-launched Kizashi sedan to be a make-or-break vehicle for the franchise.
Brown said Suzuki wants to capitalize on dealers looking to replace domestic franchises they lost last year.
"Our average sales per dealer need to be higher, and the guys at bottom are really dragging down our average," Brown said. "If we could replace them with guys like the four Saturn dealers we've signed, then we are really pulling the wagon from the front."
One of those former Saturn dealers is Peter Serra, whose stores in Flint and Saginaw, Mich., were the 10th- and 23rd-ranked U.S. Saturn stores. Serra shut his Flint store but bought out the Suzuki franchise in Freeland and moved it into his showroom in nearby Saginaw.
"Profitwise, the margins are similar to Saturn's," Serra said. "I felt the brand was moving in a direction that showed potential, and I was able to pick it up for a reasonable price."