Suzuki joins Yamaha in denying predatory pricing that merc. accuses

[flats392]

Boating Industry
Wednesday January 14, 2004


BREA, Calif. – Four-stroke outboard engine builder Suzuki Marine has joined Yamaha in denying involvement in the "predatory" pricing that Mercury Marine recently accused Japanese outboard builders of conducting.

In a letter to dealers, Suzuki Director of Marine Marketing Larry Vandiver expressed "surprise and disappointment in Mercury Marine’s allegations that the Japanese manufacturers of outboard engines have violated U.S. anti-dumping laws."

"We find this even more incredible since Mercury Marine itself is one of the largest importers of Japanese outboard products and Mercury continues to have a dominant position in the market," Vandiver added.

He stated that Suzuki has always been a fair competitor in the marketplace and has not done anything illegal.

"Suzuki Marine is prepared to defend itself against these unfounded allegations, and we are very confident that it will be proven that there is no merit to Mercury’s complaints," Vandiver wrote.

Bad timing

Vandiver also expressed concern over the timing of Mercury’s allegations.

"Mercury Marine’s action puts an unnecessary black cloud over what’s shaping up to be an exciting season, something the boating industry covets after a disappointing three-year downturn," he wrote. "Given the industry’s recent challenges, the timing of this action by Mercury is indeed unfortunate."

With recent technological advances, a strengthening economy and customer satisfaction growing, it is time to "pull together and get people on board with boating – not push them over board," Vandiver added.

In the meantime, Suzuki won’t let the allegations change its plans. Vandiver said the company will continue to offer retail promotions, be aggressive in the market during the boat show season and supply the U.S. market with product "at a fair price."

(merc's accusation) http://www.boatbiz.com/output.cfm?ID=766135

(yamaha denial) http://www.boatbiz.com/output.cfm?ID=766495

shut up and fish

[Just1more]

If they are selling the products well below what they sell for in Japan, than THAT my friends IS "dumping" and IS illegal.

If that is a fact, is Mercury lying?

When all you have in life is a hammer, treat everything like a nail.

[horseradish]

Merc's "death throes", lasp gasp..."we just can't compete...unfair...nobody's buying our product... it's someone elses' fault!"

Pursuit 2470 CC, Twin Yam 150's backed up by a 13'Gheenoe powered by pole and 9.8 merc.

[MikeT]

Considering the fact that we bought a brand new Mercury that never worked correctly and had to have its carb rebuilt after 2 times out, and purchasing 2 Suzukis that have run flawlessly for 400 hours --- I have nothing more to say!!!

[not egrp anymore]

F**k Mercury! It is a whining little pathetic piece of S**t company. If you built a better product you COULD compete!!!

When in doubt I whip it out!

[Here Fishy Fishy Fishy]

I have put a 100 hours on my Suzy 70 4/s in less than 3 months and have not had a hiccup! I haven't even had to prime the ball to get it started. Starts right up no matter how cold it is outside and purrs like a kitten! I love my Suzy.

Todd

[Dae]

quote:Originally posted by Just1more:
If they are selling the products well below what they sell for in Japan, than THAT my friends IS "dumping" and IS illegal.

If that is a fact, is Mercury lying?

When all you have in life is a hammer, treat everything like a nail.

I don't think selling below what they sell for in another country is dumping. Dumping, IMHO, would be if they were selling their motors here at a lose to gain market share.

BTW, from what I remember about Japan, almost anything sold there is more expensive then it is here.

[dilligafda]

[/quote]
I don't think selling below what they sell for in another country is dumping. Dumping, IMHO, would be if they were selling their motors here at a lose to gain market share.

BTW, from what I remember about Japan, almost anything sold there is more expensive then it is here.[/quote]

Yes it is dumping by definition of the law and Japanese manufactures are (by some reports) cutting profits to gain market share. If you read the previous post on this topic, there is a good definition of what is going on in there. Not that I really care who is pointing fingers at whom, it just seems to me that if a company is selling an equal product at an equal price (yen vs. dollar and all that stuff) there shouldn't be anything to holler about!

[looneytunes]

Hi,

Maybe I am reading this thread wrong. I think quite a few threads thoroughly discuss how the cost of a boat has gone out of control and that we are getting much less for much more $ The same applies to marine engines.

I think the Japanese have got it right. First take a look at the auto industry. I will say one word and that will say it all. Honda. Excellent value for the dollar and beats the snot out of most american cars pound for pound for quality, reliability and service.

I am not sure, but I think the Mercury Optipmax engine is a result of a co-venture with Yamaha who produces the same engine under its label and I think the HPDI is the model. I just don't think that the Optimax is a high pressure direct injection (HPDI) it only uses low pressure. Check me on that.

In the outboard market, you used to have Mercury dominating. The other manufacturers had serious issues with quality and service too. The quality and service were sub-par and still are at Mercury from the people I talk to. They say give me a Yami over the Merc.

Now Mercury and Yamaha's joint venture is over. Merc used Yami to design the Optimax and Yami co-opperated and built a better engine after the marriage was over. They are on their own to continue developing their similar products designed by the same engineers. Yamaha is coming out on top and Mercury is crying foul.

Now Suzuki is gaining market share and Mercury is crying foul.

Is this just a case of cry baby?

I say hey, let the Japanese manufacturers dump their products in the US. Look what it did for the auto industry. American cars are made much better now to compete with the Japanese. Now you can buy and American car and know that you have a car that is competitive with the Japanese cars. When was the last time you saw a 50,000 mile throw away american made car (which were prolific in from mid 70's - early 80's). It's been a while with the few exceptions of the true budget cars (geo,festiva, K-car etc.)

Like I said, I am not sure that I have read the thread in the right context, but if I have, this is my honest opinion


LooneyTunes
Dave

PS> The only thing predatory is the pricing of ALL outboards: 15,000 for a 250HP outboard (this number is from memory of about a year ago when I was looking at Yamis). Trust me. Yamaha and Suzuki aren't taking any kind of loss with the incentives that they offer. It seems like Merc wants to price gouge and keep the prices very high for their profit.



Sorry! This picture will have to do till they unwrap the new boat in April. Then I'll have a nice respectable picture as part of my signature.

[dilligafda]

looneytunes states "I am not sure, but I think the Mercury Optipmax engine is a result of a co-venture with Yamaha who produces the same engine under its label and I think the HPDI is the model. I just don't think that the Optimax is a high pressure direct injection (HPDI) it only uses low pressure. Check me on that."

OK I'll check you on that, there is no similarity between the Optimax and HPDI other that direct injection and there was no collabaration between Yamaha and Mercury on those models.

This whole dumping thing isn't about market share IMHO. It's about selling products in the US for less than they are being sold for overseas given the value of the currency of that country.

And not egrp anymore, you must have had some kind of trouble with Merc to make a statement like "F**k Mercury! It is a whining little pathetic piece of S**t company. If you built a better product you COULD compete!!!" Pretty bold statement!

One last comment, this was posted by looneytunes "When was the last time you saw a 50,000 mile throw away american made car (which were prolific in from mid 70's - early 80's). It's been a while with the few exceptions of the true budget cars (geo,festiva, K-car etc.)"

First off most those cars were all labeled as American and built overseas and I have a 1994 Geo Metro with 130,000+ miles on it and still going strong, 50K mile car? I think not!

Anyway, have fun and happy boating!

[rushman]

Hi from rushman.

Mercury sells for less in europ the last time I looked. But Yamaha and Honda are the preferred Motors. Perhaps they will be accused of dumping overhere. Anything imported into the U.K seems to jump by 1 Third straight away.
but I think that all Companies sell for as much as the market will stand.

rushman

[looneytunes]

Hi dilligafda,

Thanks for checking me on the Yami Merc co-venture. I did some further checking with Merc Marine in Wisconsin. Here is the story.

According to Merc. There is a co-venture between Yami and Merc. The co-venture involves the 4 stroke Yamaha and Merc EFI. The Merc EFI is actually built on a Yami powerhead.

General Poll: Would you buy a Yami over a Merc EFI.

My personal vote is neither. I am an I/O man. Looking at boats around the marinas I'd have to say Yami is the clear choice over Merc EFI.

This still does not change my opinion that Merc is playing cry baby.

I am sorry to disagree with you. It is about market share.

The Japanese engines are eating up market share (first Yami gets a piece then Suzuki, who next?)and Merc is nervous.

Also, consider that price is relative thing after you figure in exchange rates, import/export taxes, dealer subsidies for repair etc. I am sure it is all pretty equal.

I am glad you have had great success with your Geo. It is a value car and you got some serious value out of it, assuming that you haven't put any money into repairs and transmissions. I speak from personal experience. I can give you the names of 4 people who had to sell the car after 48,000 to 57,000 miles (That's a tight grouping) because of maintenance costs. However, I am glad that you did get a good one.

I myself have a 1994 Honda Accord with 206,000 miles on it. NEVER in the shop for a mechanical problem not even a transmission yet, but once for the window falling off the track and once for the heater control on inside of the car.

To emphasize my point nobody says Wow 206,000 miles, they say you have just reached the break in point. I hope you understand what I was trying to say about 50 K throw aways. It was for reference, not meant to offend.

In any case, Just like the Japanese car market, I think that this healthy competition will force all engine manufacturers (not just Merc) to produce a better product and bring customer service and satisfaction back into focus.

The winners will be the boaters because they will get better prices and better service.


LooneyTunes
Dave



Sorry! This cheesey manufacture's picture will have to do till they unwrap the new boat in April. Then I'll have a nice respectable picture as part of my signature.

*

[7-up]

I'd uy the Merc

[7-up]

I meant I'd buy the Merc

[honda cat]

merc is yamahas bigest customer they buy most of their four strokes from them just as johnson buys most of its four strokes from suzuki .seems to me this will push the price they have to pay for these motors up? legal fees are not cheap . the only one that will make out on this deal is the lawyers . and this is also why we pay more. In certain countrys we pay more or less for motors the legal liability costs have to be figured into the price of the motors not just the cost of production . no matter what happens the lawyers win they get there legal fees and at the end of the day we pay the bill

NO BAD DAYS

[Thom]

Folks, I could be dead wrong about this but as I understand the problem you may be talking about the wrong problem completely.

Here is how I understand Mercury's complaint.

Mercury has contracted to buy some certain (large) number of engines from Suzuki, some model that is identical to Suzuki's own labeled model, just painted black for Mercury. The contract calls for a specific price to be paid by Mercury per engine. I'll make up an number and say its $5,000. At this price Mercury could ship the engines, stock parts, provide service, and make a profit as well as allow for a profit for the dealers.

The problem is that since entering into the contract Suzuki has lowered the selling price of that same engine in the US to less than $5,000 at the retail level. That means that other than to folks who have some sort of manical brand loyality (which makes absoluty no sense at all if what you are buying is a black Suzuki engine) they won't be able to sell any of these things at all even though they are contractually bound to take delivery for a good number of the things.

That could be dead wrong but its how I understand the problem to work.

Thom

[trouty]

It's even easier than that Thom - remember pearl harbour - buy the merc!

Cheers!

[Beuford T. Justice]

Thom,
Some interesting points to be made from the information contained in your post.
The biggest point I see is Mercury would have to be pretty dumb business wise to sign a contract with any supplier without having specific language in it to prevent a scenario like that from happening.

Does not play well with others.

[Whaler27]

Well Thom, its Yamaha not Suzuki that Merc buys from. In any case, just some speculation here but I wouldn't be at all surprised if the Yamaha things that Merc buys are priced in Yen and that they have to pay for them in Yen. If that is the case, then with the dollar's decline, it's become quite expensive to import if they didn't hedge against the possibility of a decline in the dollar's value at the time they entered the contract. At the same time, for their own importing activities, the Japanese have probably hedged against the dollar's decline and so the pain they experience importing into the US when the dollar declines is reduced. So Mercury could be feeling the squeeze on margins from higher import costs and hedging by the Japanese causing them to scream "Uncle". Just a theory on the motivation here.

[Beuford T. Justice]

Now why is it that OMC has ceased to exist, and now Mercury seems to be on the ropes?
It seems as if our American industries aren't able to successfully compete with Japanese industries.
Why is that?

Does not play well with others.