Volkswagen and Suzuki: Establishing a new low-cost connection

Volkswagen Up!

Now that Suzuki has become part of the Volkswagen Group, the importance of the relatively small Hamamatsu-based player is bound to increase dramatically. By joining the VW fold, Suzuki gains access to the r&d pool of the world's most advanced volume car manufacturer. In exchange, the Germans can tap Suzuki know-how about small cars -- specifically, how to build them at a profit. The Suzuki connection will not, however, affect the New Small Family of superminis currently under development for the VW, Audi, Seat, and Skoda brands. Work has already advanced to a point where switching to a cheaper Suzuki architecture would make no sense-at least as far as sophisticated markets like Europe, North-America, and Japan are concerned. The existing Suzuki microcar platform is too narrow, too limited in terms of wheel diameter, and too weak structurally to be merged with the NSF/VW Up! components set, but Volkswagen management is evaluating the option to tap the new partner's DNA for certain emerging markets such as India, where a Japanese car dressed up in VW livery may be the only way to meet the cost and volume targets.

More significant economies of scale are expected from the next generation of all-new jointly created entry-level products. Here, the VW group is currently evaluating the upcoming new versions of the Suzuki Jimny (due in 2010), the SX4 (in 2011) the Vitara/Grand Vitara (also 2011), and the Alto/Splash (2013/14). The German auto giant is looking to add compact crossovers to its portfolio, and will likely do so with a rustic entry-level 4x4 twinned with the next Jimny and a notably more up-market SX4 derivative. The Volkswagen brand is reportedly keen on tapping the iconic Jimny, on turning the next SX4 into kind of a baby Tiguan and on plugging he gap between the NSF/Up! and the VW Polo with a version of the next Alto/Splash. As far as component sharing is concerned, anything from future two- and three-cylinder engines to downsized A/C units and common electronic platforms is under discussion.

At this early stage, it's not yet clear to what extent Suzuki motorcycles may also be part of the game plan. According to a source close to Ferdinand Piech, who had earlier tried to bring Ducati into the fold, VW might be tempted to install low-cost motorcycle engines in a budget-priced metro edition of the NSF. In a second step, the Germans may want to tap their new subsidiary's obvious strength to resurrect the NSU motorcycle company.

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