Suzuki agreed in June to buy diesel engines from Italy. Sounds like a nice plan except the company has a partnership agreement with Volkswagen, which also has 20-percent stake in the Japanese company. When VW served notice of an infringement of the cooperation agreement, a company spokeswoman said "We will have to see now how Suzuki reacts." Well, they just got their answer.
Suzuki Chairman Osamu Suzuki announced that his board of directors officially dissolved "the comprehensive partnership and the cross-shareholding relationship with Volkswagen AG." (Full announcement here)
"I thought they understood that being a partnership of equals was important, but it gradually changed," Suzuki said. "If it keep going in this direction, it will become a ball and chain for Suzuki's management."
Suzuki executive vice president Yasuhito Harayama insisted that they had not breached the contract, saying that the Fiat agreement was in place for a long time and that VW could not supply a similar engine.
Both executives, however, said that the engine issue is not the main point of contention. Instead, they took offense to a section of VW's annual report that stated it would "significantly influence financial and operating policy decisions" at Suzuki. For the incredibly independant Suzuki (the company and the man), that seems to have been the beginning of the end to an alliance that has been tumultuous from the beginning and has yielded very little.
The capital alliance was originally intended to provide Suzuki with Volkswagen technology in return for inroads into Suzuki's primary market: India. It sold 1.13 million cars there in 2010 versus VW's 53,300. Two years after the agreement was inked, no joint projects have begun, nor have boat loads of Polos begun flooding the streets of Delhi.
However, as much as Suzuki may want to split, Volkswagen insists it does not intend to sell or reduce its stake in Suzuki even if the partnership is on hold.
"The crux of the matter is the cooperation between two very different cultures," said VW CEO Martin Winterkorn. "At the moment, we have taken a timeout. Nonetheless, we will hold onto our shares."
A Suzuki (the company) press release stated in Japanglishlegalese that "Since the purpose based on which Suzuki transferred its shares to Volkswagen AG will be lost upon dissolution of the partnership, Suzuki is going to request Volkswagen AG to dispose of Suzuki shares held by Volkswagen AG according to Suzuki's intention."
Sounds like some couples counseling is in order. Maybe a trip to the Marriage Ref.
( Automotive News )
mazdamike17 says:
12:42 PM, 09/12/11
I saw Suzuki depart from VW, and VW should let them and not be difficult. If Suzuki can make all their cars as good as the Kizashi, then all the power to them to be independent. VW is actually regressing, making cheaper products and lowering their quality. Their reliability is already in the toilet typically, so I don't see why people prefer their products, I never have and probably never will own a VW, to me they are usually unreliable and have boring power trains like that pos 2.5 they stick in everything, update that garbage already!