There was much ado about the million dollar deal between Suzuki Motor Corp and Volkswagen AG. The deal was to permit Suzuki to have access to Volkswagen’s high technologies and advanced hybrid, and in return they would be permitted access to their leading technology in small-cars.
This deal took off after VW bought nearing 20 per cent stake in Suzuki for $2.5 Billion in December of the year 2009 and in return Suzuki bought 2.5 per cent stakes of VW at a price of 1.3 Billion dollars.
This deal was initially appreciated all over as it promised anew and a very efficient product in the automobile industry, but later a conflict started emerging where VW claimed that Suzuki is being secretive about their technology and is instead expecting more and more insight into their technologies. This had to be obviously followed by the complaint of no cooperation from Suzuki’s side.
Recently a Japanese auto maker comments on this deal saying that both the Companies need to back out from this partnership.
Today it has been over 18 months since the deal had been officially signed, but no progress has been made or seen. The Executive Vice President of Suzuki said that VW wrongly claimed that they could influence their management.
Mr. Yasuhito Harayama, the Executive Vice President of Suzuki clears it out that when they had finalized the deal with VW they had made themselves very clear, that they do not wish to be a consolidated company under them, but continue to remain independent.
Quoted of the V.P “We feel we need to return to the starting point, including over the ownership ratio”. Harayama is a former bureaucrat of Japan’s economy and also a part of the ministry of Trade. He was employed by Suzuki two years ago.
He adds that the understanding of each others integrity, in-dependency and equality is mandatory for any sort of cooperation to bloom without conflicts.
There have many rumors regarding VW. These reports state VW’s intentions to bring Suzuki, Japan’s No.4 automobile producer under their control.
The Vice President claims that Volkswagen had classified them as a company consolidated under them which they could “greatly influence” by using the technique of ‘equity-accounted method’
By limiting Volkswagen stake to 19.9 per cent Suzuki’s Chief Executive Osamu Suzuki has clarified, at the time of the deal, on being equal partners.
Currently Suzuki has been slowly purchasing more and more shares of the German Automaker in the ‘cross-shareholding’ agreement. Also there is a mere about Suzuki gaining a deal of partnership with Fiat, but no there are no official records confirming this yet.