Bi-Polar Suzuki Not Sure What To Do With VW

Mark Stevenson
by Mark Stevenson
bi polar suzuki not sure what to do with vw

Suzuki and VW don’t seem ready to officially call it quits just yet. The two companies are still talking, with both sides continuing to see positives in what was to be a partnership on small cars and Suzuki’s domination of emerging markets.

Senior management from both sides, including Osamu Suzuki, are currently in talks to revive the partnership as it could help Suzuki spread their R&D costs over multiple products and give them access to VW technology. Volkswagen wants a greater foothold in India and China, where Suzuki has been wildly successful, a stark contrast to their presence in North America. If talks fail, the courts have some decisions to make.

The situation came to a head two years after the partnership between the two companies was initially formed, with both parties calling the other out for breach of contract. Since then, the matter has been before the courts as Suzuki demanded back VW’s 19.9% share in the Japanese company. Volkswagen is currently Suzuki’s largest shareholder, though the company is controlled by the Suzuki family.

For what it’s worth, talks could go either way. As we reported last year, Osamu Suzuki is a bit of a wild card. When the partnership was active, engineers at the two companies worked quite well with each other. But, Osamu Suzuki and other members of senior management at both companies felt they were getting raw ends of the deal.

A slighted Suzuki went to the press, calling off the partnership before making a phone call to Germany to notify Ferdinand Piech of his decision. The relationship between VW and Suzuki has been rocky ever since.

Join the conversation
  • Lorenzo Lorenzo on Jul 29, 2013

    I suspect "wild card" Osamu will have to leave the scene before this partnership problem is fully resolved. At 83, he might not be around very long, you might think, but I wouldn't be surprised if he has another 10-15 years left, or until his son eases him out somehow. That last prospect is very un-Japanese, though.

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    • L'avventura L'avventura on Jul 31, 2013

      @L'avventura Osamu Suzuki has already come out in favor of the TPP. He's also in favor for Japan to sign as many FTA as possible: For Suzuki, they want to import South Asian-made cars into Japan. This is why the TPP benefits them, but cars sold in the rest of Asia aren't kei-spec. Exporting Japanese-made kei cars is ridiculous. Minicars sell for cheap, and Japanese labor is expensive. There is no economic sense for Suzuki to sell expensive Japanese made cars for cheap across asia. As far as VW control of Suzuki, if they had any control they wouldn't find themselves in the position they currently are in. They obviously aren't calling the shots. In fact, the entire Suzuki board of directors dissolved their partnership, and their wording is harsh:

  • Asdf Asdf on Jul 29, 2013

    Back in September of last year, Ferdinand Piëch was asked why VW was keeping its stake in Suzuki, and he responded that we should "wait and see" and that it's a "company secret" (see Any clues as to what Piëch might have been talking about? I suppose we might be about to find out...

    • Lorenzo Lorenzo on Jul 29, 2013

      Hah. Piech may figure he'll outlive Osamu. The example of Jeanne Calment should be a warning that outliving somebody isn't a foolproof plan.

  • J.Emerson J.Emerson on Jul 29, 2013

    What amazing technology does VW have that Suzuki can't live without, exactly? I mean real-world stuff that will actually serve some purpose in the market, not pie-in-the-sky stuff like the XL1 or the Veyron. You can say that they might do platform sharing, but Suzuki doesn't really need it. They're big enough to develop their own designs without relying on VW's castoffs. This sounds like nothing more than an attempt by VW to hoover up more crucial developing-world marketshare. Suzuki shouldn't give that up for vague promises of "technology."

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    • L'avventura L'avventura on Jul 31, 2013

      @th009 Their developing world cars and nearly the same as their developed-market cars. We're talking about near 2.5-3 million cars one small platform (not including cars they make for Nissan, Mazda, Mitsubishi, etc.). For instance, the Suzuki Alto in India has a 800cc engine, in Japan due to the kei rules the Alto has a 64hp 660cc turbo. The new ZC/ZD Swifts even share large portion of their platform with their new global platform (which also underpins all their A/B segment cars). The very vast majority of what Suzuki makes are small A/B segment cars and their foray into slightly larger cars have been tragic commercial failures (e.g. Kizashi). Let's keep in mind, VW only sells around 700k Polos and 60k Up!s globally in 2012. When it comes to small car sales and volume Suzuki is king. Its their only real niche. In fact, its VW that wants Suzuki's small car platforms, not only do they have volume, they have supply chains and factories near the countries that they those cars actually sell (VW's supply chain network in those countries are miniscule).