Jun. 15, 2009 – A challenging first 90 days

By Neil Pascale
Editor
Take a sour economy, mix in a debilitating ban on youth vehicles and for good measure, add the headaches of launching a new retail lending program and what do you have?
Probably not the type of environment you would want to start in as American Suzuki Motor Corp.’s new national motorcycle and ATV sales manager as Rod Lopusnak has.
“You think you have your hand on it and tomorrow brings you a new twist,” Lopusnak said, speaking specifically on the economy although he could have just as easily been addressing the first three months in his role as the head of Suzuki’s sales and dealer development.
Lopusnak’s second stint with Suzuki — he previously served as its ATV operations manager — coincided with a quarter in which the industry as a whole was down more than 30 percent, according to Motorcycle Industry Council first-quarter data. Suzuki itself was down by a similar amount as its North American new unit sales declined 34 percent from the year-ago period, according to company data. In the wake of that challenging quarter, American Suzuki Motor Corp. reportedly laid off more than 15 percent of its staff at its Brea, Calif., headquarters and regional offices.
Lopusnak, however, sees some positives from the challenging quarter. He believes Suzuki’s conservative approach to its 2008 production schedule has turned out to be incredibly important, not only for its own balance sheet but for its dealer network. The latter group remains strong despite the U.S. retail sales slowdown, with Suzuki having lost less than 5 percent of its U.S. dealers in 2008 and thus far this year, Lopusnak said.
He also notes Suzuki has worked with a new retail lending partner to improve the financing process. While Lopusnak did note Suzuki has made moves to cut costs, including the layoffs and a decision not to hold a 2009 national dealer meeting, the downturn in the economy has not resulted in any significant changes to upcoming product releases.
“We haven’t decided to delay any of our product that is on the burner for the next 24-36 months,” he said, while also noting, “the longer the economy stays challenging, it will definitely affect future product for everybody.”
Suzuki has made noticeable cutbacks on its worldwide exports, decreasing these in 2008 almost 13 percent compared to the previous-year period. The company made even bigger cuts in the final four months of last year, when its exports fell almost 38 percent.
“After going out and visiting dealers, I think for sure they absolutely did the right thing,” Lopusnak said of the export cutbacks, “because there are not Suzuki price wars out there and you’re not seeing discounting and refund after refund after refund.
“Hopefully when a Suzuki dealer sells a Suzuki, he makes some money.”
That eye on production and its resulting impact on the brand at retail remains a priority, as Suzuki has trimmed its 2009 motorcycle production down by nearly 58 percent compared to the year-ago period, according to the Japan Automobile Manufacturers Association.
“We want to have brand equity and don’t want to turn out like Chrysler and all the negative situations in the auto industry where everything is discount, discount, discount,” Lopusnak said.
Besides addressing inventory, Lopusnak and American Suzuki Motor Corp. have worked on its new revolving retail finance program with its new lending partner, Sheffield Financial. Lopusnak said he recently visited the lending company to work on improving facets of the Suzuki program. Although Sheffield Financial recently told Powersports Business it is working to improve its lending approval rates for its motorcycle segment, Lopusnak says the concentration on his trip was to look at the process and see what, if any, changes could be made to improve it.
“Anytime you start with a new finance company, there are always a lot of challenges,” Lopusnak said, “Not only approvals just the whole process that makes it easier or harder for a dealer to do business.”
Lopusnak notes many multi-line dealers had become acquainted to a lending system used by HSBC, which was used by a number of OEMs, during the past years so the Sheffield Financial system naturally presented some different processes.
“We found some areas where we could improve on,” Lopusnak said, noting Sheffield Financial’s sincere interest in making those changes in a timely manner. “We’ve made a lot of changes, and we will continue to do that to where we can get it to where dealers are 100 percent comfortable.”
Suzuki also is closely looking at its financing promotions, trying to find a balance between what is financially right for the rider but also enticing enough to draw them into the dealership.
“We’re suffering a little bit from the amount of creative financing the industry has done,” Lopusnak said, referring to the popular low- to no-payment plans that have resulted in some riders not having the equity in their vehicle to be able to trade up after two years. “We’re conscious of that.”
Has Suzuki found a common ground, something that is both enticing and fiscally responsible for the rider? “We’re working hard on it,” Lopusnak said. “It’s probably not going to be a one-shot deal where we’re going to find that perfect scenario. We’re going to keep working at it.”
Another area that will continue to be top of mind for American Suzuki Motor Corp.’s new national sales manager: dealer communication.
“The great thing about Suzuki when I got involved with them 10-12 years ago it was almost an open-door policy,” Lopusnak said. “You could reach anybody in the company on any day. I kind of feel we’ve lost a little bit of that. So we’re all making a conscious effort on the management side to get back to that.
“It’s not always going to be exactly what they want to hear,” he said of the communication with dealers, “but I want to make sure we’re getting back to them. We’re telling them the best possible information we can tell them. All the time.”