Volkswagen and Suzuki Officially Enter Partnership

Volkswagen and Suzuki seal the deal

Volkswagen and Suzuki seal the deal

The news yesterday that Volkswagen has bought 20 percent of Suzuki wasn’t much of a surprise, considering we mentioned the possibility way back in September.

Back then, representatives from both companies said a partnership wasn’t going to happen.

But it’s a partnership that does make sense, considering VW’s desire to rule the world and continue as its largest automaker, a crown stolen from Toyota just about a month ago. To keep its title VW needs to sell a lot more small cars in emerging Asian markets, such as India. Suzuki, as it happens, is the leading auto manufacturer in India and the third largest in Japan (behind Toyota and Honda).

That’s why, strategically, the move is a home run for Volkswagen. For Suzuki, it’s a lot more risky. MotorTrend says:

The company does get access to Volkswagen’s hybrid and electric vehicle technology and the company’s larger vehicle platforms, traditional weak points for the Japanese automaker.

That could be good. But there’s also a chance though that Suzuki could get swallowed up by the giant Germans and simply become the 12th brand of the Volkswagen Auto Group.

Just check out that picture on top and tell me Osamu Suzuki, chairman and CEO of Suzuki Motor Corp., (on the left), doesn’t realize his company could get completely overtaken. That’s VW’s Martin Winterkorn giving him a comforting pat on the back as if to say, “It’s OK, little fella, we’ll take good care of your company,” while somewhere his henchman are breaking out in maniacal laughter.

I’m worried about Suzuki’s future, especially in the U.S. market. The company’s SX4 is a hit, and the upcoming Kizashi appears to be even better. Now that Suzuki is finally hitting some sort of a North American stride, I’m wondering how quickly VW could make it all go away.

I could see a future where VW doesn’t see the need for Suzuki in the U.S. anymore. I think that would be a shame. Do you?

-tgriffith

2 Comments

  1. I meant to comment earlier on this. That picture of Osamu and Martin just speaks volumes. In WW-II the Germans and Japanese were allies, of course, and we all remember how that turned out. But this time, the U.S. isn’t going to be the big winner. I think VW could be a good thing for Suzuki, giving it tremendous technical and distribution power. Maybe the world is ready for another German-Japanese combine.

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