Rumors of a tie-up between Volkswagen and Suzuki have been circulating for some time now, but as of today, it’s official. VW and Suzuki reached an agreement for a long-term partnership in which VW will buy 19.9 percent of the Japanese company.
The proclamation marks the second official purchase made by Volkswagen this week. VW announced on Monday it now owns 49.9 percent of Porsche. Both moves signal VW is dead serious at eventually overtaking Toyota to become the world's largest automaker.
In addition to adding sales volume to the German brand, VW’s stake in Suzuki gives it access to the brand’s small car expertise. VW hopes to utilize Suzuki's small car portfolio in order to gain access to various emerging and Asian markets, where such vehicles are extremely popular. Suzuki, in return, will get help from VW developing both hybrid and electric vehicles.
Although VW is taking a share in Suzuki, the two companies will remain separate entities. As of now, Volkswagen isn't planning a complete takeover of Suzuki. The partnership will remain limited to cooperation on certain vehicles for the foreseeable future.