Suzuki Volkswagen tie-up in troubled waters

Wednesday 20 July 2011, 10:18 AM by Vikas Yogi

The closely monitored Suzuki and Volkswagen partnership is showing signs of uneasiness. The deal was penned down with the German giant buying about 20 percent of stake in the Japanese company late in December, 2009. The alliance was expected to bring change in the current vehicle and engine development programs along with creating increased grip on the auto market.

But the situation is deteriorating with differences of opinion escalating in the Suzuki Volkswagen collaboration. The news has gone beyond rumors with VW CEO Martin Winterkorn admitting issues between both the companies. Suzuki is repeating their demands regarding the independence and equal partner status in the alliance.

Suzuki Volkswagen tie-up in troubled waters | CarTrade.com
vw suzuki hand clasp tieup

A concerned Suzuki executive V-P Yasuhito Harayama said "The understanding that we are independent companies, and equal partners, is the absolute prerequisite in pursuing any specific cooperation. We feel we need to return to the starting point, including over the ownership ratio."

It’s not that only Suzuki is having problems with the tie-up, the German counterpart also voiced its frustration by saying that it can be difficult to work with a Japanese company. Winterkorn added, "In the West sometimes we make decisions more quickly. In the Japanese culture, sometimes things are a little different."

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