Toyota will stop distributing Volkswagen cars in Japan at the end of 2010.  The existing Volkswagen dealers under Toyota distributorship (called DUO) will move to a new direct dealer contract with VW Group of Japan (VGJ).

The two companies said the decision was initiated by Volkswagen which has been reviewing its global sales structures since the economic crisis in the autumn of 2008.  As part of its strategy to rationalise sales structures, Volkswagen wanted to move to direct contracts with all dealers in Japan without a distributor, which TMC agreed to.

VGJ currently has 250 dealerships in Japan making it the largest importer network.  The agreement with Toyota was inked in July 1991 and TMC started DUO operations in 1992. The network has grown to 134 dealerships run by 88 companies and, in 2008, out of 45,522 Volkswagen cars sold in Japan, DUO dealers sold 21,774 units, thus heloing make VW the top import brand for nine consecutive years.

The news came about two weeks after Volkswagen and Suzuki announced a new capital alliance deal.

Toyota and VW jointly built and sold pickup trucks in Europe in the 1990s.