Volkswagen reviewing its plans to work with Suzuki

Article by Christian Andrei, on July 28, 2011

Volkswagen is currently studying its plans to work with Suzuki, Chief Financial Officer Hans Dieter Poetsch disclosed. During a call with investors on Thursday, Poetsch disclosed that the strategic cooperation is developing more slowly than expected. He added that it is presently not being implemented with the expected level of intensity.

In December 2009, VW bought 19.9 percent of Suzuki for $2.5 billion with the anticipation that it will gain access to small car technology and it will be able to tap the market in India better. Suzuki is the leading player in India.

In exchange, Suzuki would gain access to the hybrid and other advanced technologies of Volkswagen that it cannot afford on its own.

During the early part of this month, Yasuhito Harayama, Suzuki’s Executive Vice President blamed the lack of progress of cooperation on Volkswagen's belief that it could exert influence on Suzuki management.

He added that the two companies need to go back to the drawing board on their partnership. In addition, Suzuki Chief Executive Officer Osamu Suzuki disclosed in a blog, which was published on the Nikkei newspaper's online site, that Suzuki had perused Volkswagen's technologies and "found nothing that it wanted right away."

In June, Suzuki announced an agreement to purchase 1.6-liter diesel engines from Fiat S.p.A. for a vehicle to be manufactured in Hungary. Suzuki and Harayama stated that this transaction proved that the company could do without Volkswagen.

Topics: vw, suzuki

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