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Could VW, Suzuki Be About To Revive Failed Deal?

VW Wanted To Build A Bigger Presence In India’s Small Car Market..

Suzuki Sought Access To VW’s Diesel Engines, Hybrids, Electric Cars

 Whisper it, but Volkswagen and Suzuki might be about to kiss and make up after throwing their respective toys out of the pram a couple of years ago.

According to Germany’s Manager Magazin, VW and Suzuki might have decided to proceed with the original plan to share technology and end the legal divorce case.

The cooperation plan between Suzuki and Volkswagen fell apart when the Japanese company ordered new high-tech diesel engines from Fiat and not VW. There had been rumblings before when Suzuki objected to being referred to as an associate company in VW’s annual report, with the implication that the German company could order the Japanese around.

Suzuki formally asked for the deal to be ended in September 2011.

In 2009, Suzuki and VW formed a partnership to develop small cars and new technologies. VW bought 19.9 per cent of Suzuki which in turn purchased a stake of about 2.5 per cent in VW. VW said it wanted to build a bigger presence in India’s small car market, while Suzuki sought access to VW’s diesel engines, hybrids and electric cars.

Seriously miffed
Suzuki formally asked VW to dissolve the partnership. VW said Suzuki had violated the agreement, and was seriously miffed by its decision to buy diesels from Fiat, which eagerly stirred up the aggravation by mischievously talking about how Suzuki would make an interesting partner in Asia.

Deutsche Bank took some comfort from the prospect of a revived partnership.

“We obviously can’t judge on whether or not these two partners can overcome the cultural barriers that have been built over time, but a continuation of this cooperation would present an unexpected turn,” said

Deutsche Bank analyst Jochen Gehrke.

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