Suzuki Displeased About Volkswagen’s View of their Alliance

Suzuki Motor Corp of Japan had entered a partnership with European auto major, Volkswagen; however it doesn’t look like things are going well with them. A recent claim made by Volkswagen seems to have miffed its Japanese partners. The claim by the European company that they could influence the management of the Japanese company does not seem to have gone down well with Suzuki.

Suzuki’s Executive VP, Yasuhito Harayama, in charge of the company’s relations with the European auto company, was quoted as saying that they had made it very clear when partnering with the company that they were not looking for consolidation and would remain independent.

He also added that there were many other auto companies that were ready to work with them on equal footing, and they would continue to have tie-ups with a wider range of firms while holding back on their projects with Volkswagen, till they both could reaffirm their earlier understanding.

Harayama added that as of now, they do not have any particular joint development plan with Volkswagen. This recent announcement could be a big step back in the partnership of the two companies that had a positive effect on financial markets during its formation back in Dec 2009. The partnership was expected to have provided Volkswagen inside track to small car technology, which the Japanese company leads in, whereas Suzuki would get access to the company’s next generation and hybrid car technology that they could not afford developing on their own.

The chief executive of Suzuki, Osamu Suzuki insisted on them being equal partners and limiting Volkswagen’s stake in the company to 19.9%, saying they would pay the equal value by buying out the shares of the German company.

Suzuki also made their displeasure known, in a blog post on the newspaper Nikkei’s online site. The size of the 2 companies are vastly different and therefore with the time past by, the company had the mistaken notion that Suzuki is under their umbrella.

The blog post also stated that Suzuki had gone through Volkswagen’s technology and they did not find anything they needed right away. Suzuki also said that they were relieved that the European manufacturer had made progress in producing a low priced car without the help of Suzuki for India and South Africa. Only last month, Suzuki had announced their deal of buying diesel 1.6l engine’s from Fiat for building a car in Hungary, a deal which proved that they could do well without Volkswagen, according to Harayama and Suzuki.

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