Wednesday, July 20, 2011
By Pranjal Gera
Suzuki-Volkswagen alliance in trouble
Much-hyped Suzuki-Volkswagen Alliance seems to be in trouble as the partners fail to resolve their issues about the joint venture. In December 2009, Volkswagen bought around 20 percent stake in the Japanese carmakers which raised hopes for cooperation in engine and vehicle development but, the partnership plans has no apparent action on ground.
According to reliable sources, CEO, Volkswagen admitted that there are differences with Suzuki over the joint venture. While, a Senior Suzuki official reported that there are issues like ‘equal partner’ status and independence. Suzuki wants to return to the starting point of the joint venture which also includes the ownership ratio.
Suzuki though much smaller in size to Volkswagen always wanted to retain its operational freedom and independent identity. The Japanese carmaker made it clear from the beginning that it would remain independent and it will not become consolidated.
However, market was assuming that Volkswagen with its huge number of brands like Audi, Volkswagen, Skoda, Bentley, Seat and Scania will rule over Suzuki and will merge it into a group brand gradually.
Reported by an Industrial Source, earlier at the company’s annual accounts conference, Volkswagen spokesman stated that it’s difficult to work with a Japanese partner and from the beginning there were differences in their approach.
Initially, the partnership was expected to be fruitful for both the companies. Suzuki was to gain from Volkswagen technology in hybrids and diesel engines and Volkswagen was to benefit from Suzuki’s hold in Indian Auto market and its small car technology.
Some of the popular hatchback models in the Indian auto market are Toyota Etios Liva, Ford Figo, Maruti Swift, Hyundai i10, Chevrolet Beat and Volkswagen Polo. Apart from these popular models, cars going to hit the Indian roads this year are Chevrolet Beat Diesel, Maruti Cervo and Honda Brio.