Volkswagen acquires 19.9% stake in Suzuki

Volkswagen acquires 19.9% stake in Suzuki

Suzuki VW logo

Volkswagen has just announced that it has “reached a common understanding to establish a close longterm strategic partnership” with Suzuki Motor Corporation. Rumours of such a match-up have been circulating for some months. Now, according to an official statement, VW will purchase 19.9 percent of Suzuki’s issued shares. In payback Suzuki will use up to half of the cash received from VW to buy a smaller stake in the Wolfsburg company.

Although the two automakers compete in some segments, there is a belief that they can compliment each other. VW has expertise in diesel technology and hybrid systems while Suzuki is quite strong in the fast-emerging Indian marketplace. Suzuki has a few tricks and in addition to cars and motorcycles builds marine transportation solutions and all-terrain vehicles (ATVs).

If the authorities approve the transaction, this new connection would create the world’s largest car manufacturing alliance. VW and Suzuki would surpass Toyota in terms of sales.

Consolidation seems to be the key word in the automotive industry again. Recently French company PSA Peugeot Citroën announced it was entering into a cooperative agreement with Japan’s Mitsubishi Motors. Italy’s Fiat is now playing boss at Chrysler LLC while Nissan and Renault have been tight for about a decade now. Who knows what’s next, possibly a three-way partnership?

Suzuki VW logo

Volkswagen has just announced that it has “reached a common understanding to establish a close longterm strategic partnership” with Suzuki Motor Corporation. Rumours of such a match-up have been circulating for some months. Now, according to an official statement, VW will purchase 19.9 percent of Suzuki’s issued shares. In payback Suzuki will use up to half of the cash received from VW to buy a smaller stake in the Wolfsburg company.

Although the two automakers compete in some segments, there is a belief that they can compliment each other. VW has expertise in diesel technology and hybrid systems while Suzuki is quite strong in the fast-emerging Indian marketplace. Suzuki has a few tricks and in addition to cars and motorcycles builds marine transportation solutions and all-terrain vehicles (ATVs).

If the authorities approve the transaction, this new connection would create the world’s largest car manufacturing alliance. VW and Suzuki would surpass Toyota in terms of sales.

Consolidation seems to be the key word in the automotive industry again. Recently French company PSA Peugeot Citroën announced it was entering into a cooperative agreement with Japan’s Mitsubishi Motors. Italy’s Fiat is now playing boss at Chrysler LLC while Nissan and Renault have been tight for about a decade now. Who knows what’s next, possibly a three-way partnership?

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