VW To Grab Suzuki Majority?

Bertel Schmitt
by Bertel Schmitt

“According to the Wolfsburg grapevine, the Volkswagen Group is set to increase its 19.9 percent share in Suzuki by ten percent annually over the next four to five years,” says Automobile Magazine in Ann Arbor, Michigan. And they immediately ask: “What for?” Right.

First of all, my personal Wolfsburg grapevine comes up dry as far as the story is concerned. The grapevine says it had never heard of such a plan. Of course, the grapevine also says: “In these matters, we usually are the last to know. We usually read it in the paper.”

Automobile Magazine speculates that the rumored increase in shareholdings is for all kinds of things, such as a Japanese version of the Up! (or Lupo, as it will be called), or Suzuki’s SX4 as the underpinnings for small VeeDub Polo-based crossovers. Even Automobile Magazine can’t believe the last one: “Will VW spend the money to develop a brand-new body for four brands?” Especially not for crossovers that are not more than cars with added macho.

My take: Whatever exchange of DNA matter there may happen, it does not necessitate larger shareholdings. For ages, VW built the Volkswagen Sharan together with Ford’s Galaxy in a joint venture plant in Portugal. Their Routan, FWIW, is a badge-engineered Chrysler. All kinds of cooperations can and are being done without big share deals. Sure, a little share swap makes it feel more serious, but why overdo it?

The only reason for more shares would be more control: If Volkswagen would buy 10 percent annually of Suzuki over four to five years, that would give them a majority in Suzuki in three years. Osamu Suzuki may be “80, going on 56” as Reuters had it, but quite possibly he may also want to enjoy his golden years on a pile of gold. Suzuki would be part of the Volkswagen Group. The perfect Plan B for when VW can’t complete their Strategie 2018 under their own power. Last year, Toyota made 7,234,439 units, Volkswagen sold 6,290,000, and Suzuki 2,387,533. A combined Volkswagen/Suzuki would have sold 8,677,533 units in 2009, Strategie 2018 completed 9 years before plan. Suzuki would finally be somebody in China, Volkswagen would get somewhere in India. The perfect Axis for world domination. This time, without the Italians.

Bertel Schmitt
Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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  • John Horner John Horner on Jul 23, 2010

    Volkswagen is one of the few automotive companies which has, by and large, been successful at acquiring other automotive companies and then making a go of it. Audi, Skoda and Bentley all came into the fold that way. Bringing Suzuki under the tent makes sense as well, and adds important missing puzzle pieces in Japan and India. It is fascinating how VW has been able to pull off the acquisition thing multiple times, whilst BMW and Daimler have spectacularly bungled their every attempt to do so. BMW blew it with Rover and has pretty much blown it with Rolls as well. Daimler has Chrysler and Mitsubishi term sheets hanging on its wall of shame. VW, on the other hand, doesn't seem to have a single acquisition train wreck. Amazing.

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    • Steve65 Steve65 on Jul 24, 2010

      I'd say VW rather spectacularly bungled the attempt to acquire Rolls Royce. Bought the company, but failed to get the rights to the name. Had to pass it over to BMW, since the assets without the name weren't worth squat.

  • Nick Nick on Jul 23, 2010

    Hmph, Suzuki scores a hit with the Kizashi and then VW shows up to drive their quality into the ground. If I was Suzuki I'd resist to my last breath.

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  • Michael S6 Somewhat shocking that Tesla has maintained its sky high stock valuation. The faithful continue to have unshakeable faith in Musk. Tesla models are in dire need of redesign to be competitive although the model 3 recently got a refresh. I test drove a model S six months ago and it's was very nice driving car. However, the interior was very underwhelming in quality of materials and design. There is absence of physical controls such as a turning stalk, and the rear seat was uncomfortable. Tesla would have been in much better shape if they redesigned its current models to face the competition, rather than spending so much money creating a Cybertruck.