By on August 30, 2015

Volkswagen and Suzuki agreed to establish a comprehensive partnership

Osamu Suzuki (middle right), chairman of Suzuki Motor Corporation, can finally celebrate his biggest win. After a failed alliance with Volkswagen put Suzuki — the chairman and company — on the back foot for almost four years, the International Court of Arbitration of the International Chamber of Commerce in London has decided in the Japanese company’s favor. Suzuki will purchase back their own stock from Volkswagen.

Suzuki received news of the ruling Saturday and filed the information with the Tokyo Stock Exchange on Sunday.

“It’s good that a resolution came. I feel refreshed. It’s like clearing a bone stuck in my throat,” said to reporters gathered at a news conference in Tokyo, reports Automotive News. “I’m very satisfied with the resolution. Through it, Suzuki was able to attain its biggest objective.”

In a statement released today, Suzuki Motor Corporation “requested Volkswagen AG to terminate their business and capital alliance through amicable negotiation. However, as VW failed to respond to Suzuki’s request, Suzuki served on 18 November 2011 a notice of termination of the Framework Agreement that was made with VW. Further, on 24 November 2011, based on the parties’ agreement, Suzuki filed a request for arbitration in London, which is the place of arbitration with the International Court of Arbitration of the International Chamber of Commerce.”

The tribunal found in favor for Suzuki in two areas: a termination of the “Framework Agreement” and Volkswagen’s divestment of shared in Suzuki.

From Suzuki:

The Tribunal found that the Framework Agreement was validly terminated by Suzuki’s notice of termination dated 18 November 2011 mentioned above, such termination being effective from 18 May 2012.

The Tribunal upheld Suzuki’s claim regarding VW’s disposal of its shares in Suzuki and ordered VW to divest forthwith those shares to Suzuki or a third party designated by Suzuki using a method which is reasonably determined by Suzuki.

Volkswagen’s 19.9-percent share in Suzuki will be purchased by the Japanese company through the Tokyo Stock Exchange.

However, Suzuki could still incur financial penalties later, as Volkswagen’s counterclaim of breach of contract was also partially upheld. That claim will be “addressed in a further stage of the arbitration,” stated Suzuki Motor Corporation. According to Volkswagen in a statement, Suzuki “failed to give Volkswagen last-call rights for the delivery of diesel engines. Volkswagen reserves the right to claim damages against Suzuki.”

The official end of the alliance will likely trigger more succession planning for the Japanese auto and motorcycle manufacturer. In June 2015, Osamu Suzuki appointed his eldest son, Toshihiro, to the role of president.

 

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3 Comments on “Suzuki: “I Feel Refreshed” After Win Against Volkswagen...”


  • avatar
    JohnTaurus_3.0_AX4N

    German-Japanese alliances rarely work out.

    Good for Suzuki, I can just imagine how Mr. Suzuki feels, like there is an invisible boot on your throat and the relief you feel when the burdon has passed.

    I hope they can get back on track. Suzuki has worked best on its own, mostly. Their engineering is often sound, their product pretty good. I wish they were still here but that ship has sailed. Here’s wishing you the best, Suzuki (the man and the company).

  • avatar
    ciscokidinsf

    This has to be, hands down, the worse automotive partnership ever – almost 20% of Suzuki exchanged hands and they did NOT produce one measly vehicle together. Not even an engine. Not one!

    The reason they wanted VW was to get some better engine tech and better car electronics. Suzuki makes pretty decent vehicles. I have a Kizashi, and its outstanding – but it could use a better, newer engine and electronics are a very weak spot. Same for Hybrid technology, Suzuki has none yet, which is what they really wanted from VW. Their cars are the perfect size to be Hybrids.

    They are free from VW, good, but despite their sweet Indian spot as #1 car manufacturer, and dominating a few asian countries, there is relatively little out there for Suzuki. They will need to invest oodles of money to survive or merge with someone.

    So, now what Suzuki? Sergio will certainly take you, but his eyes want something big.

    • 0 avatar
      CoreyDL

      They should just stay small and keep doing what they’re doing. They seem to be self-sufficient enough, even though they couldn’t hack it in the American market. But that’s okay, they’re other places.

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