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Suzuki has to take out $45M loan just to shutter US dealers

Bloomberg reports American Suzuki is set to borrow up to $45 million to to close its automotive dealerships and freshen up its it motorcycle and marine business. Suzuki Motor Corporation will loan American Suzuki the funds at three percent below the London Interbank offered rate in order to offer dealer owners a cash payment in exchange for voluntarily abandoning franchise agreements. The company's 216 dealers have 10 days to make a decision on the matter. Under the plan, Suzuki would give dealer owners half of what they're owed in one lump sum, and the dealers would then be able to pursue the remaining debt through the company's bankruptcy procedure.
U.S. Bankruptcy Judge Scott C. Clarkson granted American Suzuki interim authority to borrow the funds, but Bloomberg reports the company will likely return to court in a few weeks to seek up to $100 million. According to Richard Pachulski, a lawyer for Suzuki America, the automaker may owe its dealers somewhere around $50 million.

Volkswagen forced to sell stake in Suzuki

The six-year-long failed marriage between Volkswagen and Suzuki has finally come to an end. Almost. An arbitration panel in London issued its final verdict which, according to a VW press release, cleared Suzuki in terminating the agreement, so VW now needs to get rid of its 19.9-percent share. However, the tribunal's decision said VW performed all of its obligations and Suzuki didn't – the Japanese carmaker should have given VW last-call rights for a delivery of diesel engines, but failed to. The breach opens Suzuki up to damage claim, but so far VW only says it reserves the right to sue. Now that Suzuki has an outside investor to provide funds it meant to get from VW, perhaps both can get back to their reasons for being. The press release is below. Ruling in arbitration proceedings: Cooperation between Volkswagen and Suzuki deemed terminated - Arbitral tribunal confirms Volkswagen met contractual obligations and finds that Suzuki has ordinary right to terminate agreement based on reasonable notice - Volkswagen to dispose of its 19.9 percent stake in Suzuki and expects positive effect on Company's earnings and liquidity from transaction - Arbitrators also find that Suzuki breached its contractual obligations to Volkswagen under the agreement and that Volkswagen has right to claim damages Wolfsburg, 30 August 2015 - An arbitral tribunal in London has announced its ruling in the dispute between Suzuki Motor Corporation and Volkswagen Aktiengesellschaft. As a result, cooperation between the two parties is deemed terminated. The arbitrators confirmed that Volkswagen met its contractual obligations under the cooperation agreement and found that Suzuki has terminated the agreement upon reasonable notice. Volkswagen will therefore now dispose of its 19.9 percent stake in Suzuki and expects a positive effect on the Company's earnings and liquidity from the transaction. The arbitral tribunal also confirmed that Suzuki breached its contractual obligations to Volkswagen under the agreement and that Volkswagen has the right to claim damages. "We welcome the clarity created by this ruling. The tribunal rejected Suzuki's claims of breach and found that Volkswagen met its contractual obligations under the cooperation agreement. Nevertheless, the arbitrators found that termination of the cooperation agreement by Suzuki on reasonable notice was valid, and that Volkswagen must dispose of the shares purchased.

Watch Indian cars fail Global NCAP crash tests miserably

It's taken for granted that cars currently for sale in Western countries pass crash tests, and often merit four- or five-star safety ratings in NCAP or NHTSA tests. This is why these scores attained by Indian market cars are so galling: seven vehicles currently sold in India got zero stars in any category – a horrifying clean sweep. It is understandable that cars sold in a developing market are cheap and equipment levels are low, but acceptable crash safety is something that should be considered essential in all markets. The cars tested in the Global New Car Assessment Programme were Hyundai's Eon, Maruti Suzuki's Eeco and Celerio models, Mahindra's Scorpio SUV and several Renault Kwid models. All of the cars were manufactured in India for the Indian market, and the Mahindra Scorpio was the sole larger car. It was first introduced in 2002, with updates made in 2006 and 2014. Mahindra has long planned to export its vehicles to the United States, with the likeliest version a pickup variant of the Scorpio. Renault's Kwid crossover was tested in three versions. Initially, the Kwid was tested with and without airbags, and on both accounts it scored zero stars in adult occupant protection and two stars in child occupant protection. Renault strengthened the bodyshell and the crash tests showed the updated Kwid's structure did not collapse; still, it was rated unstable and that it couldn't withstand further stress. On closer inspection, the structural reinforcements were found to be done only on the driver's side of the passenger cell. Renault has confirmed more safety updates are on their way. "We welcome Renault's efforts to correct this and we look forward to testing another improved version with airbags. Renault has a strong record of achievement in safety in Europe and it should offer the same commitment to its customers in India", says Global NCAP's David Ward. "Global NCAP strongly believes that no manufacturer anywhere in the world should be developing new models that are so clearly sub-standard. Car makers must ensure that their new models pass the United Nations' minimum crash test regulations, and support use of an airbag." The airbag-equipped Kwid was the only model of the seven cars tested that was fitted with one. This content is hosted by a third party. To view it, please update your privacy preferences. Manage Settings. This is how the Mahindra Scorpio performed. This content is hosted by a third party.