Suzuki snaps ties with Volkswagen

Suzuki has called off its association with Volkswagen on November 20, citing irreconciliable differences


Volkswagen Suzuki


The Japanese auto maker has claimed that VW has blocked access to its core technologies that was part of the agreement between the two auto firms. Suzuki has also claimed that VW was not willing to resolve the issue by means of negotiations. Meanwhile, VW has refused comment over the development, and voiced its commitment to the collaboration instead.

Volkswagen purchased a 20 per cent stake in Suzuki for $2.5 billion in December 2009, becoming the largest shareholder in the #4 Japanese auto maker. As part of the tie-up, the German company was to get access to Suzuki’s the small car technology, while Suzuki would get access to Volkswagen’s hybrid and other advanced technologies.

The falling out began when VW tried to take control of Suzuki’s management. Suzuki Executive Vice President in charge of relations with Volkswagen Yasuhito Harayama, made it clear that they didn’t wish to be consolidated and wanted to remain independent.

In turn, VW wasn’t happy with Suzuki’s sourcing of diesel engines from Fiat and blocked access to its hybrid technology, in response to which, Suzuki threatened to sever the collaboration.

Suzuki’s calling off of the alliance comes as no surprise in wake of the ongoing strife.

From what seemed like a win-win enterprise, the VW-Suzuki partnership has ended in a shutdown, that illuminates the thorny side of partnerships in the auto industry.