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VW and Suzuki End Angry Feud

Arbitration ends failed green car alliance.

by on Aug.31, 2015

Suzuki pulled out of the US with the failure of its midsize model, the Kizashi.

An arbitration tribunal has pulled the plug on a once-promising green car alliance between Volkswagen AG and Suzuki Motor Corp. The German maker has now been ordered to sell back the 19.9% stake it had purchased in the Japanese car company.

But VW says that may yet sue Suzuki for damages as a result of the break-up of the alliance which was formed in 2009 but never got off the ground, instead developing into a bitter public dispute between the two companies.

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“It used to feel as if a small bone were stuck in my throat,” Suzuki Chairman and Chief Executive Osamu Suzuki told a news conference after learning of the decision. “I feel so refreshed now.”


VW Looks at Low Cost Brand for Emerging Markets

German maker hopes to halve current base price.

by on Oct.15, 2012

A 1946 "people's car." VW is looking at ways to repeat its success by targeting emerging markets with a new bare-bones car line.

It’s first “people’s car,” the Beetle, was originally designed to help get a new generation of German drivers on the road – and during the ‘50s and ‘60s became the car of choice in the U.S. and many other markets for first-time buyers.

But the latest version of the Volkswagen Bug is anything but an economy car.  And with automakers anxiously eying opportunities in today’s emerging markets, that has VW thinking about ways to repeat its past success – possibly by launching an all-new line of economy models that could be sold for as little as $6,500, the maker has confirmed.

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The maker has considered several ways to get there, possibly by partnering with erstwhile competitors such as Malaysia’s Proton or Japan’s Suzuki, but VW officials are now focused on launching a new sub-brand of their own, they’ve confirmed in several interviews.


VW Holds Suzuki Stake Though Legal Battle Looms

Japanese maker accuses erstwhile German partner of breaching their agreement.

by on Oct.17, 2011

Suzuki was hoping to pick up some of VW's technical know-how for vehicles like its Kizashi.

Despite an increasingly tense war of words that could land the erstwhile partners in court, Volkswagen says it has no intention of selling off its stake in Japan’s Suzuki Motor Corp.

The two makers have been engaged in an increasingly noisy public spot, in recent weeks, Suzuki officially serving Volkswagen AG with a “notice of breach “in relation to the companies’ Framework Agreement, which was signed in 2009.

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Complicating the situation, VW now accuses Suzuki of breaching the agreement itself by agreeing to purchase diesel engines from Volkswagen’s Italian rival, SpA.

“The discussion between both parties will be exclusively conducted internally,” said a statement from Volkswagen, Europe’s largest maker and currently the second-largest worldwide behind General Motors.


Volkswagen Buys 19.9% of Suzuki

Move targets Toyota in Asia. Fight for number one intensifies.

by on Dec.09, 2009

Maruti Suzuki dominates the Indian market.

Maruti Suzuki dominates the Indian market.

Volkswagen AG will buy 19.9% of Suzuki Motor Corporation for $2.5 billion, which in turn will reinvest half of the proceeds in VW stock it was announced in Frankfurt and Tokyo today. If the transaction is approved by regulators, VW would become the largest shareholder of Suzuki.

The latest crossholding, obtained at a more than 10% discount to the price of publicly traded Suzuki shares, is clearly designed to bolster VW’s  efforts in Southeast Asia auto markets, long dominated by Toyota Motor Corporation.

VW is the leader in China, where Toyota has a growing presence, but is locked out of Japan and has a weak presence in India where Suzuki is the dominant player through its control of Maruti, which has 50% of the market.

Asia is the only growth market for automobiles in the world, as European and American economies continue to languish.

Toyota is locked in to struggle with VW for the title of the world’s largest automaker.

The difference between the two companies is that VW is profitable and using the cash generated to make strategic alliances, while Toyota is retrenching and attempting to return to profitability after posting record losses.

Suzuki, for its part, said that it is not big enough to develop new low cost models, as well as the low CO2 emissions models that will require expensive hybrid and electric technologies.