Has the alliance between Volkswagen and Suzuki reached the end of the road? The Japanese carmaker today served a ‘notice of breach’ in relation to the companies’ framework agreement signed in December last year.
The notice requires that VW remedies “numerous breaches” of the framework agreement and Suzuki said it follows a period of prolonged efforts to progress its relationship with VW, as agreed at the partnership’s inception.
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Suzuki chairman and CEO, Osamu Suzuki, said: “This capital alliance was intended to facilitate Suzuki’s access to VW’s core technologies. I remain disappointed that we have not received what we were promised.
“If Volkswagen will not allow access it must return Suzuki’s shares. We are very encouraged by Suzuki’s consistently solid performance. We remain on track for profitability and are excited about the potential for future growth.”
The Japanese carmaker has been complaining for some months about what it sees as a domineering approach to the relationship by VW. The German carmaker has also been upset an engine deal signed between Suzuki and Fiat.
VW, which holds a 19.9% stake in Suzuki, said it was currently reviewing the situation. The Japanese carmaker has a 1.49% shareholding in its German counterpart.
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By GlobalDataWhatever the outcome of Suzuki’s action today, VW has previously said its stake in the Japanese company would remain unaffected.
The spat goes back to the summer of this year when German media reported that VW was planning to make the Japanese company its subsidiary by buying a bigger stake.
Der Spiegel magazine quoted an unnamed VW executive as saying that the possibility of launching a hostile takeover of Suzuki had not been ruled out.
Der Spiegel said that VW, the leading shareholder in the Japanese company with a 19.9% stake, wants Suzuki as its base for small size car business within the group.
In a statement through the Tokyo Stock Exchange cited by news agency AFP on Monday, Suzuki said it had asked VW to end the capital and business alliance between the firms and get rid of its stake in the carmaker.
“It’s like a divorce,” Osamu Suzuki told a news conference. “Rather than trying to find faults in each other, it’s better to smile at each other and say we were not destined (to get married).”
For its part, VW earlier served notice of an alleged infringement relating to the supply of diesel engines to Suzuki from Fiat with which the Japanese firm shares a model.
