VW and Suzuki settle four-year dispute

31 Aug 2015 | Author: | No comments yet »

Suzuki Plans to Go It Alone After Ending Four-Year VW Dispute.

Volkswagen AG will sell a Suzuki Motor Corp stake valued at about 463 billion yen (€3.4 billion) following a decision from arbitrators that ended a four-year dispute over a failed partnership.After four years of dispute, arbitrators upheld Suzuki’s request to terminate a 2009 agreement that never yielded a single joint project with the German company. VW will sell its 19.9 per cent holding after the arbitrators upheld the Japanese carmaker’s request to end the co-operation, the companies said in separate statements on Sunday.

Suzuki, a specialist in inexpensive cars, is smaller than global rivals like Volkswagen, which sells about four times as many vehicles as its former Japanese partner. That puts pressure on Suzuki to safeguard its dominance in India and control rising development costs for green-car technologies, while pursuing a goal to boost annual revenue to 3.7 trillion yen by March 2020. “Any potential partner would be quite worried about what sort of partnership it would have with Suzuki after what happened with VW,” said Ashvin Chotai, managing director of researcher Intelligence Automotive Asia. “The culture of Suzuki is not very conducive towards working in a joint venture.” The goal of the pact with VW was to cooperate on small, fuel-efficient cars for emerging economies, providing Suzuki with access to technology while giving VW a wider role in the Indian market through Suzuki’s business there. Fiat Chrysler Automobiles NV Chief Executive Officer Sergio Marchionne, who is prodding the auto industry to consolidate, has expressed interest in talking with Suzuki in the past. As trust broke down, the companies accused each other of breaching the accord. “After their irreconcilable quarrelling, the separation was unavoidable,” said Ferdinand Dudenhoeffer, director of the Centre for Automotive Research at the University of Duisburg-Essen “Mr Suzuki didn’t want to be a VW employee, and that’s understandable.” Even in winding down the relationship, the companies were at odds. Suzuki said VW had to sell the stake back to them or a party of the Japanese company’s choosing, while VW said the buyer of the stake hadn’t been decided.

The one thing that’s clear is that it won’t be working with VW again. “You don’t remarry someone whom you’ve divorced,” Osamu Suzuki said. – (Bloomberg)

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