Relationships between Volkswagen and Suzuki have become unpleasant

Article by Christian Andrei, on July 18, 2011

The relationships between Volkswagen AG and Suzuki Motor Corp. have become unpleasant, as no progress has been made in the partnership since December 2009 when VW purchased a nearly 20 percent share in Suzuki for $2.5 billion.

Investors looked at this purchase positively as they thought that Suzuki would gain access to Volkswagen's hybrid and other advanced technologies while Volkswagen would have an inside track into Suzuki's leading small-vehicle innovations.

However, after more than 18 months, there was no progress made in the partnership, a fact that Executive Vice President Yasuhito Harayama of Suzuki blamed on Volkswagen's belief that it could exert influence over Suzuki's management.

Harayama, who was in charge of relations with Volkswagen, informed the press that Suzuki has made “very clear” when it was tied up with Volkswagen that it did not want to be consolidated and would want to remain independent.

He added that they feel the necessity to go back to the drawing board, including on the ownership ratio. He further stated that the understanding that the companies are both independent and equal partners is the “absolute prerequisite” in pursuing any cooperation.

Various reports since late last year suggested that VW was contemplating on putting Suzuki under its control, Harayama mentioned. Harayama was a former bureaucrat at the economy and trade ministry in Japan. He was hired by Suzuki two years ago.

Topics: suzuki, vw, partnership

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