Bad Blood Sours VW, Suzuki as Partners
A two-year partnership between German giant Volkswagen AG and Japan's nimble Suzuki Motor Corp. appeared to be unraveling Wednesday after the Japanese company's chairman said communications had broken down.
"Volkswagen is not talking to us," Chairman Osamu Suzuki told Bloomberg News in an interview. "We have no plans to talk to them."
His comments follow months of disparaging remarks by VW officials about the Japanese company's attitude and retorts from their counterparts at Suzuki about VW's overbearing manner, reported The Detroit News.
"Relations between the two firms have been tense from the start and have seemingly deteriorated even further," said Tim Urquhart, a London-based analyst at IHS Automotive.
In 2009, when VW acquired 19.9 percent of Suzuki for 222.5 billion yen, or $2.9 billion, the deal was viewed as a coup for the German automaker. It was expected to gain access to the low-cost carmaking technology that has made Suzuki a leader in India.
The two companies said they intended to cooperate on technology, including hybrids and electric cars, and vehicles for emerging markets. But almost two years later, no joint projects have been announced.
Surprisingly, Suzuki decided in June to order diesel engines from Fiat SpA of Italy.
Some analysts sensed strains from the outset, as Suzuki stressed that it wanted to remain independent.
According to Bloomberg, the latest tensions were sparked by VW's reference to Suzuki in its annual report as an "associate" that it could significantly influence.
VW sold 7.2 million vehicles in 2010, more than double Suzuki's 2.6 million unit sales in its last fiscal year, including 1.1 million in India.
"Suzuki really needs a big manufacturer behind it, so the effect of a withdrawal would be far worse for them," said Aleksej Wunrau, a Frankfurt, Germany-based analyst at BHF Bank AG. "Volkswagen could very well step back from Suzuki and either seek another partner or start afresh on their own in Japan and India."
More Industry

World EV Adoption Set to Grow
A new report says the segment, despite recent setbacks in some regions, is poised for acceleration as many countries look to reduce pollution.
Read More →
Black Book: Weekly Market Update
Wholesale automotive auction business stayed steady last week as bidders encountered lower prices, analysts observed.
Read More →
Pricing Transparency Drives Purchase Consideration
An annual study by JD Power found that clear pricing matters to consumers on automaker websites, so much so that it increases their purchase consideration.
Read More →
Black Book: Weekly Market Update
Used-vehicle market depreciation was the prevailing story in the wholesale market last week.
Read More →
Smaller Is Looking Better
A growing number of Americans in the market for a new vehicle are opting for more affordable options, not waiting for market stability to bite the bullet.
Read More →
U.S. EV Market Slowly Stabilizes
U.S. electric-vehicle interest is slowly stabilizing since a major dip in sales after last year's end of the federal EV tax credit, and hybrids remain the leading electrified power train.
Read More →
Global EV Market Entering New Phase
Automakers are making investments to lower battery costs and optimize production to meet changing consumer needs.
Read More →
Black Book Weekly Market Update
The holiday weekend, not surprisingly, put a drag on wholesale automotive activity last week, analysts observed.
Read More →
Auto Affordability in Context
Cox Automotive points out the complex circumstances that have led to eye-popping vehicle prices.
Read More →
Black Book: Weekly Market Update
Automotive auction inventory increased last week, giving choosy bidders even more leeway.
Read More →