Suzuki Says Sayonara to Volkswagen

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Back in 2009 Suzuki and Volkswagen made some headlines, as the German automaker took a 19.9% stake in the Japanese manufacturer. The basic points of the agreement were that Volkswagen would get access to Suzuki’s small-displacement motors and Indian presence, while the latter would benefit from Volkswagen’s larger-vehicle technologies, etc.

Seemingly however doomed from the start, the partnership in motorcycle circles erroneously spurred some interesting thoughts of a Volkswagen motorcycle coming to fruition. While industry journalists spun gold out of hay, the two behemoth manufacturers failed to come to terms on any of their proposed partnership goals, leaving both parties to wonder why they were interested in each other, let alone financially intwined.

With that strife coming to a head the past few months, it comes with little surprise then that Suzuki has issued a statement saying that it was terminating its partnership with Volkswagen. As much of a lesson in cultural differences as it is one on business positioning, the news certainly doesn’t come as a shock to industry insiders, though it does shed some light on Suzuki’s recent withdrawal from motorcycle racing.

Looking to raise cash to purchase back the 19.9% equity stake Volkswagen holds in Suzuki, the Japanese manufacturer has reportedly been pinching every penny to once again become a sovereign company. The result could very well account for Suzuki’s withdrawal from World Superbike, and it more recent departure from MotoGP. Reading Suzuki CEO Osamu Suzuki’s statement regarding Volkswagen, some would consider Volkswagen’s position as a hostile one.

“Today Suzuki terminated the partnership with VW. Suzuki will be seeking the return of its shares from VW in arbitration,” said Suzuki. “I am disappointed that we have to take this action but VW’s actions have left us no choice. They have continued to refuse our attempts on numerous occasions to resolve these issues through negotiation. I am more disappointed that having shaken the hand of Dr. Winterkorn in agreeing to this partnership, he has not honoured his commitment to grant Suzuki access to what was originally agreed.”

“In the absence of VW’s cooperation and given its failure to do what was agreed, there is no basis for the partnership to continue. With the cessation of the partnership there is also no basis for VW to hold on to Suzuki’s shares. We will now work to restore the relationship between Suzuki and VW to its original state as independent parties who do not restrict each other’s business. I call on Dr. Winterkorn to honour this.”

Source: Suzuki & WSJ