Suzuki is demanding VW to retract its claim regarding the violation of their tie-up agreement

Article by Christian Andrei, on September 23, 2011

Suzuki Motor Corp. is demanding that its partner Volkswagen AG retract its claim that the Japanese automaker violated their alliance agreement by procuring engines from rival company Fiat. The demand was issued in a letter by Suzuki Chairman and CEO Osamu Suzuki and was addressed to VW CEO Martin Winterkorn.

Specifically, Suzuki wanted VW to recant its accusation publicly by September 30, 2011, on grounds that the reputation of the Japanese automaker has been "significantly damaged" by VW's statement.

On September 11, Volkswagen announced that Suzuki breached their 2009 tie-up agreement when it bought diesel engines from Fiat, according to Autonews.

The Japanese automaker denies that the purchase was in violation of their agreement. The dispute was one factor that prompted Osamu Suzuki the following day to ask for a "divorce" from the "ball and chain" of VW.

He insisted that VW should sell its 19.89 percent share in Suzuki, and in exchange, Suzuki would offload its 1.49 percent in VW. At a news conference on September 12 and again in latest press release, the Japanese automaker stated that it consulted VW regarding the purchase of Fiat engines in January -- and that both sides accepted it at the time.

Suzuki stated that it turned to Fiat after the engines offered by VW failed to meet the specifications of Suzuki. On another note, Suzuki also claimed that it was denied access to much of the technology of VW, despite earlier expectations for technology sharing.

Topics: suzuki, vw, partnership

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