Japanese car maker Honda is guarded with a view on the new Suzuki-Volkswagen alliance that came into existence earlier this year. Volkswagen had acquired 20 percent stake in Suzuki Motor Corp and both the companies are working on developing cars with amalgamation of their strengths. Suzuki holds expertise in the small car segment and emerging markets along with low cost development of cars, Volkswagen’s key strengths lie in developing cars with German engineering clubbed with superior safety and quality features.
Honda India has been doing pretty well in the Indian market especially with its sedan Honda City being the bread earner for the company. However, it has failed to make its mark in the important small car segment with Honda Jazz failing to impress Indian customers. Recently, Honda India President and CEO stated in the press, “This (VW-Suzuki partnership) is very worrying for us.”
Honda says that the partnership will put the company under high pressure to maintain their brand characteristics and values in a cost competitive environment. The partnership between the two automobile giants will introduce new products and their synergy can significantly bring down the price. Honda stated that it needs to come up with smarter and more innovative solutions to compete strongly in the new markets.
