Uh-oh. Septuagenarian Ferdinand Piech is expressing youthful impatience with octogenarian Osamo Suzuki. Volkswagenâ€™s Chairman of the board â€śis reportedly irked at the slow progress of his firm’s alliance with Suzuki,â€ť says The Nikkei [sub]. The reason? â€śA year after Suzuki and Volkswagen agreed on a capital and business tie-up, the track record of their partnership remains devoid of significant accomplishment.â€ť
Volkswagen is urging Suzuki to get on with the show, while Suzuki is dragging its heels. “We did not team up with VW for quick gains,” said a senior Suzuki executive. Piech on the other hand is showing â€śimpatience with what he sees as the glacial pace of progress in their efforts to work out a specific plan for cooperation,â€ť as the Nikkei puts it.
There has been intensive shuttle diplomacy between Wolfsburg and Hamamatsu, which produced exactly nothing. â€śThe time frames in which the automakers are trying to extract benefits from the alliance apparently differ,â€ť says the Nikkei with dry Japanese humor.
VW spent 1.7 billion euro ($2.25 billion) to buy a 19.9 percent stake in Suzuki, and Winterkorn needs to show that there is a ROI if he doesnâ€™t want his head handed to him at the Hauptversammlung, or main shareholderâ€™s meeting next April.
But herein lies the rub: Suzuki received cash when they needed it most, and Volkswagen expects a lot of interest:
- Volkswagen wants to capitalize on Suzukiâ€™s overwhelming market share in India. VW is nobody in India, while Suzuki owns half the market. One reason for this is Suzuki’s huge presence in India.
- In China, Suzuki could benefit from Volkswagenâ€™s market dominance. But VW wants Suzukiâ€™s Kei car help to produce the small low-price cars that will be read hot in Chinaâ€™s rural areas.
- Volkswagen wants to unseat Toyota as #1 carmaker. Together with Suzuki, they could. Alone, no chance. Toyota and GM are having a neck-on-neck race for the top spot (both will probably report more than 8 million cars produced by yearâ€™s end) while Volkswagen will probably be a million units behind. Suzuki will end the year well over 2 million.
Suzuki could also use help elsewhere in the world. But their Chairman wonâ€™t be asked why he collected $2.25 billion from a bunch of impatient Germans.