Suzuki Confident Of Ending Volkswagen Partnership Woes

Mike Stevens | Jul 9, 2012

Volkswagen has wrapped up its takeover of iconic sporting brand Porsche, but things are not so rosy for the VW-Suzuki partnership signed in 2009.

Speaking in London this week, Suzuki vice president Yasuhito Harayama said that the agreement between the companies has been terminated, "thus Volkswagen does not have the legitimacy to keep holding Suzuki shares".

He said that the two companies are now in arbitration, and Suzuki is confident of a positive outcome. Hearings are expected to be heard in the coming year.

The news comes after Suzuki declared an end to the partnership, claiming that Volkswagen had not provided technologies promised as part of the agreement.

The agreement would have seen Volkswagen benefit from Suzuki's strength in the Indian market, and its expertise with sub one-litre cars.

In a statement released last year, Volkswagen said that Suzuki broke the partnership by turning to Volkswagen's European rival Fiat for supply of a 1.6 litre diesel engine in the SX4.

In 2010, Suzuki CEO Osamu Suzuki said his company would likely refuse any attempt by Volkswagen to increase its share in the Japanese carmaker beyond the 19.9 percent it paid around AU$2.7 billion for.

In November, the carmaker said it would use arbitration to force Volkswagen to sell back its stake, after Suzuki reportedly offered to buy the shares back at the current market rate - believed to be around $2.4 billion.

Follow Mike Stevens on Google+

Filed under: volkswagen suzuki, suzuki volkswagen, partnership, News, industry

Leave a comment:
Enter comment here.
  • Smart us says,
    3 years ago
    suzuki needs to be punished.. . typical opportunistic company... punishment like TitoOrtiz
  • Cam says,
    3 years ago
    Good on Suzuki for standing firm. I'm glad they have avoided becoming another one of VW's wards.
  • Darren says,
    3 years ago
    Can't believe they even got involved with the germans in 1st place. Hope they can cut their ties with VW as they dont need them to make great cars. I actually think they would have gone backwards if they had continued down this route. VW cars are and have always been so bland. Good luck to Suzuki I say.
  • cyclone says,
    3 years ago
    Talk about David and Goliath. Good on Suzuki for standing firm. VW get too much their own way !!!
  • g says,
    3 years ago
    i bet if they had to pay more not less it would be a different story.
    why is suzuki being so stubborn with one crappy engine, vw could offer so much with platforms etc
    vw bought seat and skoda when they were useless car makers about to fold and turn them into success stories.
    i think suzuki should get what they want, which is to leave the north american car market and just sell low profit small cars in the third world.
Get the Latest