WHEN Volkswagen bought a stake in Suzuki in 2009 there were hints that they would use the motorcycle manufacturer to spring-board into the two-wheeled market, but any prospects have diminished now that Suzuki look to end its two-year alliance with the German carmaker.
Securing a 19.9 percent stake in Suzuki, the main reason behind the alliance that started in December 2009 was to increase VW’s prescence in India for small 1-litre cars and give Suzuki access to hybrid and diesel technology it could not afford to develop on its own.
Whilst a venture into two-wheels was unexpected, the chairman of Volkswagen’s supervisory board, Ferdinand Piech said he selected Suzuki as a partner because they deliver “cutting-edge technology in small cars – and they build motorcycles.”
Piech himself is a noted bike fanatic; he rides Ducatis, and in the mid-80s nearly came close to buying the Italian manufacturer. Along with several of VW’s top brass also having a strong interest in bikes, there were interesting possibilities that the car manufacturer would look to challenge long-term rival BMW.
However, the relationship has been setback with problems after any meaningful progress has failed for both companies. Now VW have accused Suzuki of breaching the terms of their agreement by sourcing diesel engines for the compact SX4 car from long-term engine partner Fiat - a move that has seen the Japanese manufacter look to sever its ties with VW.
The fall-out comes after months of arguing between the two companies, as Suzuki accuse VW of wanting to take the Japanese manufacturer under its control and VW trying to make amends by promising it would not encroach on their independence.
Suzuki chairman and CEO, Osamu Suzuki offered to buy back the 19.9 percent stake from Volkswagen on Monday, and in return, promised to offload its own 1.5 percent stake in VW back to its estranged partner. In 2009 VW bought its stake Suzuki for £1.47 billion, the holding is now worth around £1.39 billion.
