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Volkswagen takes stake in Suzuki

Wed, 09 Dec 2009

VW takes a 19.9% stake in Suzuki

We’re back on the co-operation and rationalisation path again, this time with Volkswagen and Suzuki, with the announcement that VW is to take a 19.9% stake in Suzuki, with Suzuki in turn re-investing up to half of the proceeds in to Volkswagen shares.

This deal has been on the cards for some time but has obviously been pushed in to reality by the changing landscape for car manufacturers, where they seek to find a more secure future with takeovers, mergers and partnerships. Which is all very logical, even if it will inevitably lead to less choice for the car buyer in the long term. But it’s not just about securing the future, but about saving money.

VW has had its corporate eye on Suzuki for its expertise in areas that VW doesn’t. In particular, VW see Suzuki as a quick in to the burgeoning Indian market. Suzuki already has 50% of the domestic market in India through its Maruti Suzuki India Ltd business, and VW sees this as a shortcut to moving VW cars in India. The expertise Suzuki has with low-cost fuel-efficient cars also brings something to the table for VW.

Suzuki and VW have held a press conference to announce the deal. Osamu Suzuki, CEO of Suzuki, said that they plan to develop s range of hybrid and electric car solutions which will be marketed by both companies.

Step 493 in VW’s world domination plan.

By Cars UK