Suzuki-Volkswagen Issue to Affect their Indian Operations

We recently reportedly about Suzuki being upset by the claims made by partner Volkswagen. Well, the recent tiff between the two companied could have an adverse affect on their Indian operations.

Suzuki and VW got into an equity crossholding partnership around 20 months ago, which held promises for both the sides. However, last weeks events could bring the partnership, which has not yielded much so far, to a close. Suzuki occupies a quite important position in the Indian auto market’s passenger car segment being Maruti Suzuki’s parent group. Their increasing demand for diesel engines will be supplied by Fiat through their Ranjangaon manufacturing facility close to Pune that clearly indicates that they do not need help from VW on this front.

Suzuki and Fiat could team up for making diesel engines and merge their skills in producing compact fuel efficient cars in the future. Suzuki’s separation from VW could also have little effect on the latter, even on the Indian auto market where they have had a fairly late entry. They have made a heavy investment for building their brand in India, and have been generating great numbers for their Vento and Polo cars. They are also looking forward to a strategy based on long term where their recent acquisitions such as MAN could play an important role in the commercial vehicle market in India.

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