Suzuki to end alliance with Volkswagen

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.

Suzuki Information

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