We don't know how you say "Throw down the gauntlet" in Japanese, but Suzuki CEO Osamu Suzuki has apparently gone and done it. Claiming that his company's relationship with Volkswagen has the potential to become a "ball and chain" if it continues it current course, Suzuki apparently sees so little hope of remedy that he has suggested an amicable separation.

Suzuki is upset about a number of recent events, from VW's claim in its annual report that it could influence operational decisions at Suzuki, to VW's breach-of-contract accusations over Suzuki buying diesels from Fiat, to the fact that in two years there hasn't been a single joint project.

VW hasn't made any mention of walking away from the 'partnership,' instead repeatedly saying that it is reviewing the union. In sharper words, however, some VW execs have stressed that it is up to Suzuki to return to the relationship table and stop airing grievances to the press. And in an odd use of a press release, VW released the first findings of its review to announce its breach-of-contract process over the diesel situation.

Suzuki has had an engine deal with Fiat since 2005, and when Osamu Suzuki decided he didn't want VW's diesel tech, he saw no reason no to expand Suzuki's arrangement with Fiat. VW considers that a bit of double-dealing, whereas Suzuki sees tie-ups with other firms as his right. Having not read the fine print ourselves, we have no idea which firm has the defensible position. However, while the German firm still sees the Japanese concern – and its market position in countries like India – as an attractive investment still, we wonder how the growing and public kerfuffle is going to make things better. Or even sustainable.


I'm reporting this comment as:

Reported comments and users are reviewed by Autoblog staff 24 hours a day, seven days a week to determine whether they violate Community Guideline. Accounts are penalized for Community Guidelines violations and serious or repeated violations can lead to account termination.


    • 1 Second Ago
  • 40 Comments
      imoore
      • 3 Years Ago
      Judging from what's been said over the past few days, I have come to this conclusion: 1. Suzuki will likely suffer media humiliation-in Europe, at least-, as VW will likely claim that the Japanese automaker is not trustworhty and unwilling to abide by the terms of their deal. The Fiat engine deal will be the focal point, although Suzuki has been dealing with Fiat long before VW entered the picture. If the deal called for Suzuke to end its contract with Fiat, then it should have been made public. 2. VW will definitely be cast as the bully in this situation. The driving point: it doesn't want to honor Suzuki's request to relinquish the 20% of the company it owns because VW really wants to become the world's largest automaker. And that show's VW's problem, in that it would rather buy and existing company rather than develop products for and bolster its presence in developing areas such as Asia. VW has already failed in this effort when it tried to buy Proton-twice. And to try and take advantage of Suzuki's success in India? That's lazy. Personally, I don't see the big deal in becoming the world's largest. Both GM and Toyota paid dearly for their shot at the brass ring. I believe VW will crash and burn soon. I'll give them two years, at least.
        Zacarious
        • 3 Years Ago
        @imoore
        I don't even see Volkswagen making it to number one. They are so set on it that they are hurting their image and alienating die hard fans with cheap versions of vehicles previously known for their quality materials.
      • 3 Years Ago
      [blocked]
      CMP
      • 3 Years Ago
      I actually had the feeling that VW bought Suzuki in order to kill their own future competition and benefit while operating: In other words, bringing Suzuki to slow death. I hope Suzuki learnt from the mistake and stay as a small giant for years to come!
      Hazdaz
      • 3 Years Ago
      Wow, seems as though the Germans are really good at this "partnering" thing, eh?
      JamesG
      • 3 Years Ago
      Mutual trust among two head-strong cultural characteristics of the Japanese and the German were already broken and was simmering for nearly two years...salvaging their cooperation very remote and moot at this point. The VW Suzuki tandem will end...it's only a matter of time. I'm rooting for an independent and strong Suzuki...as I think the future of the fuel efficient and affordable Kei car for is going nowhere but up! Kudos for Osamu-san.
      lne937s
      • 3 Years Ago
      A significant part of Suzuki's business model relies on them making small cars for a wide array of other companies, including GM, Nissan, Mazda, Fiat, VW, Maruti, etc. The largest chunk of Japanese Kei cars, regardless of brand, are manufactured by Suziki. Suzuki-made vehicles play a major role in the growth markets of the developing world. If VW intends to restrict the partnerships Suzuki takes part in, it is a wise move for Suzuki to get out.
        mbukukanyau
        • 3 Years Ago
        @lne937s
        GM ended its relationship with Suzuki, all GM cars are now manufactured by GM
          lne937s
          • 3 Years Ago
          @mbukukanyau
          GM sold its share of Suzuki. Suzuki now no longer sells re-baadged Daewoos here at GM's command... However, the GM still sells rebadged Suzuki's overseas, like the Opel Agila.
      Steve
      • 3 Years Ago
      Suzuki should now approach Fiat for future projects. They work together now with the SX4 under a Fiat name. Why not continue with other ventures. Chrysler/Fiat/Suzuki can probably work things out that will benefit them all.
      creamwobbly
      • 3 Years Ago
      手袋を投げる tebukurowonageru
      skeptic
      • 3 Years Ago
      I believe that Suzuki execs had complained in an earlier press release about high handedness on the part of VW... *Cough* Ferdinand Piech... and high handed *Cough* Osamu doesn't know what he is talking about!!
      Leather Bear
      • 3 Years Ago
      "Don't mention the war. I mentioned it once, but I think I got away with it all right. "
      R
      • 3 Years Ago
      I can see why Suzuki is so keen to end their relationship with Volkswagen, and conversely, I can also understand why Volkswagen is so reluctant to end its relatonship with Suzuki. From Suzuki's side, Volkswagen has relatively little in the way of technology Suzuki can't either develop itself or purchase from another company such as Fiat, so there's little benefit to them from being involved with Volkswagen. From Volkswagen's side, they want to become the world's No.1 carmaker by 2018, and that's not going to happen if they don't become heavily involved in all the major emerging markets including India, where Suzuki is very, very strong. There's very limited growth potential in mature markets like Western Europe, and it remains to be seen if they'll get anywhere near achieving their ambitions of selling 800,000 cars a year in the United States.
      Kevin C Barnes
      • 3 Years Ago
      And still no Swift...
    • Load More Comments