Over Before it Began: Volkswagen and Suzuki Divorce Is All But Official

The two-year old marriage between the Germans at Volkswagen and the Japanese at Suzuki ends today amidst accusations of Volkswagen being too controlling, Suzuki seeing someone else on the side (Fiat), and VW passing off its relationship with the independent, yet sensitive Suzuki as nothing more than the two simply being associates.

Automotive News reports that Suzuki chairman Osamu Suzuki compared his company’s relationship to Volkswagen as “a ball and chain,” and that Mr. Suzuki suggested Volkswagen has some growing up to do. “I thought they understood that being a partnership of equals was important,” said Mr. Suzuki, “But it gradually changed. If it keeps going in this direction, it will become a ball and chain for Suzuki’s management.”

Suzuki and Volkswagen partnered up in 2009 with VW taking a 19.89 percent stake in Suzuki, and Suzuki taking a 1.49 percent stake in VW. The union was supposed to grant Suzuki access to future Volkswagen hybrid and electric car technologies, while it was supposed to net VW a larger presence in India, the second fastest growing major economy, where Suzuki sells over one third of the new vehicles in the country.

The verbal battle goes back and forth between the two automakers. Volkswagen spokesperson Michael Brendel told Automotive News that Suzuki had broken the sanctity of the marriage – err, partnership agreement, by deciding to buy diesel engines from those home wreckers over at Fiat.

AN also reported that Suzuki Vice President Yashutio Harayama said, “It was absolutely not a breach of contract,” before Mr. Suzuki tried to lighten the mood saying Harayama was just “excited” because he had been the chief negotiator on the union. Suzuki had said previously that Fiat-sourcing had been in place since 2005, and that the deal with Fiat had no conflict of interest because VW couldn’t supply a similar engine.

When Automotive News asked Fiat CEO Sergio Marchionne for comment at the Frankfurt Motor Show he said that Suzuki and Volkswagen's marital issues, "have nothing to do with us." The CEO of the free-loving Fiat then added, "We talk to everybody. But we are not talking now with Suzuki about a platform. There is an exchange of information."

Even with the allegations concerning Suzuki’s infidelity and Volkswagen’s quest for control in the relationship, Mr. Suzuki and Harayama insisted that the decision for the split comes from comments VW made back in April to investors when it described Suzuki as an “associate” and said that it could potentially, “significantly influence financial and operating policy decisions” at the smaller, yet fiercely independent Japanese manufacturer.

As a result of the split, Suzuki insists that Volkswagen sell its stake in Suzuki, so that it may do the same. Suzuki has also said it’s open to future alliances with other automakers, with Mr. Suzuki telling Automotive News that the condition for another partnership would be, “[having] an adult mentality,” before clarifying by saying, “A good adult relationship.”  Volkswagen, which called its relationship with Suzuki “under review” back in July, has said that that review is still ongoing.

Source: Automotive News (Subscription Required)

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