Suzuki Racing To Stay Ahead Of Partner Volkswagen

Suzuki is hustling to avoid needing more help from partner Volkswagen. For instance in India, a market VW covets. Suzuki used to own more than half on the Indian market. In the recent months, that share slipped a bit. Not because customers in India don’t like Suzuki. Suzuki can’t keep up with the demand. Customers have to wait for months to get delivery of popular car models such as the Swift hatchback and the Swift Dzire sedan, reports The Nikkei [sub]. Suzuki is finally doing something about it.

Suzuki is thinking about building a new plant India. Currently, they have capacity for 1m units. An expansion of Suzukis Manesar plant would add capacity of 250,000 cars a year. If everything goes according to plan, by end of 2011.

Suzuki has to get its act together to keep partner Volkswagen at bay. According to The Nikkei [sub], “In talks on their tie-up, Suzuki insisted that VW’s stake had to remain under the 20 percent threshold that would turn Suzuki into an equity-method affiliate of VW.” If Suzuki needs more money, VW would be glad to help out – for a little more equity that would get Suzuki closer to mami.

Suzuki is banking on the newly released Swift, and on the overall success in India. The capacity constraints however won’t go away overnight. India is Suzuki’s most important market. Japan is next. Here, everybody expects rough going when October comes around. With not enough capacity in India, and too much capacity in japan, all Suzuki can do is ship cars to India. That costs money. Says The Nikkei: “Suzuki wants to reap the benefits of its alliance with VW without being gobbled up by the German auto behemoth with an appetite for overtaking Toyota as the world’s top carmaker.” One slight misstep, and Mr. Winterkorn will be right next to Osamo Suzuki, with a solicitous “may I help you?”