Suzuki and VW divorce

Suzuki Motors, stung by its failed co-operation with Volkswagen, is planning to defend its independence. After four years of disputes, arbitrators have upheld the Japanese company’s request to terminate a 2009 agreement that secure to yield one single joint project with the German marque. As a result, Volkswagen will sell its 19.9 per cent Suzuki stake valued at about 463 billion yen – or NZ$6b. “The past six years have been valuable experience,” says chairman Osamu Suzuki. “I came to realise there are companies different from us”, he adds, and – as a result – independence will be a precondition for future dealings. Suzuki, a specialist in inexpensive cars, is smaller than global rivals such as Volkswagen, which sells about four times as many units. That puts pressure on the Japanese marque to safeguard its dominance in India and control rising development costs for green-car technologies while aiming to boost annual revenue to 3.7 trillion yen by March 2020. The goal of the pact with Volkswagen was to co-operate on small, fuel-efficient cars for emerging economies, and thereby provide Suzuki with access to technology while giving the German company a wider role in the Indian market through Suzuki’s business there. Relations soured in 2011 after the Japanese company agreed to buy diesel engines from Fiat, reports Reuters. Suzuki faces the prospect of having to pay damages after arbitrators ruled the Japanese company breached the agreement. The amount of will be pinned down in future proceedings.