Volkswagen and Suzuki have announced a new partnership which sees VW buying 19.9% of Suzuki. Suzuki will then take half the money it receives from VW and return the favor by buying VW shares.
Although the new partnership involves VW buying almost 20 percent of Suzuki, both automakers will remain independent. The partnership will allow both automakers to collaborate on smaller vehicles.
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PRESS RELEASE:
Volkswagen and Suzuki agreed to establish a comprehensive partnership
Important step towards the future for both companies
Tokyo/Wolfsburg, December 9, 2009 - Volkswagen Aktiengesellschaft and Suzuki Motor Corporation have reached a common understanding to establish a close longterm strategic partnership. A framework agreement has been signed by
representatives of both companies today.
In terms of global presence and product diversity, the partnership marks an important step towards the future for both Volkswagen and Suzuki. In terms of product portfolio, global distribution and manufacturing capacities, Volkswagen and Suzuki ideally complement each other. The companies plan a joint approach to the growing worldwide demand for more
environmentally friendly vehicles. The management of Volkswagen and Suzuki have concluded that the complementary strengths of each company make for a perfect fit in exploiting their respective advantages as well as rising to the challenge of the global market. In the automotive industry, where globalization and diversification proceed in parallel, both companies will establish a cooperative relationship while respecting each other's independence as a stand-alone entity. Both parties are focused on achieving synergies in the areas of rapidly growing emerging markets as well as in the development and manufacturing of innovative and environmentally friendly compact cars.
To support a smooth development of this relationship, Volkswagen will purchase 19.9% of Suzuki's issued shares. The Closing of the transaction is subject to approval of the relevant authorities and is expected in January 2010. Suzuki intends to invest up to one half of the amount received from Volkswagen into shares of Volkswagen. Both companies will form a
long-term strategic partnership based on this which will support their successful strategies in these challenging times.
As demand continues to rise for smaller cars and for powertrains with higher fuel efficiency and lower CO2 output, Volkswagen and Suzuki will offer a compelling solution for customers in emerging markets buying a car for the first time and also for customers in advanced economies seeking to lower their CO2 footprint while still enjoying the freedom of transport offered by an exciting range of cars.
A press conference will be held on 5 pm in Tokyo together with a webcast which will be available on http://www.primestage.net/hosting/VW-Tokyo/
Company information
Suzuki is the world leader in the mini-car segment: with a workforce of approximately 51,000, the company sold 2.3 million vehicles and 3.1 million motorcycles in the 2008/2009 financial year (to March 31), generating sales revenue of €20.9 billion and an operating profit of €534 million. Suzuki operates 35 production facilities in Japan and other countries such as
Indonesia, India, China, Thailand and Spain.
In fiscal year 2008 Volkswagen, which has a workforce of 370,000, sold 6.3 million vehicles, generating sales revenue of €113.8 billion and achieved an operating profit of €6.3 billion. Volkswagen operates 61 production plants worldwide.
Comments (11)
Wow. That's strange. Two auto makers with some of the worst quality cars are teaming up. Maybe they should buy a stake in Chrysler, too.
Posted by wymer100 | December 9, 2009 8:09 AM
Posted on December 9, 2009 08:09
@wymer100
i dont see how that comment makes any sense about VW but as far as suzuki goes....ya....agreed!
Posted by Phil | December 9, 2009 2:12 PM
Posted on December 9, 2009 14:12
VW is definitely growing. It could be the biggest automaker around soon.
Posted by DuDe | December 9, 2009 3:22 PM
Posted on December 9, 2009 15:22
I think he's pointing out the fact that VW makes attractive cars. Ones that until recently had severe electrical issues... (the new ones still might, it's just a little early to tell).
Posted by Brian | December 9, 2009 5:54 PM
Posted on December 9, 2009 17:54
@DuDe
VW became the worlds largest auto maker a few weeks ago and took over toyota. i am notg sticking up for VW because i dont personally find their cars attractive to me, but i think they make pretty solid cars.
Posted by Phil | December 9, 2009 7:15 PM
Posted on December 9, 2009 19:15
I am also puzzled by the idea that VW makes such bad and unreliable cars ? ...wtf are they feeding to those mexicans who build US versions of these cars ...here in europe VW is considered as one of the better ones in terms of build quality and reliability ( that is in non-premium segments)
and even so suzuki ..never realy heard of any problems from owners here ... must be some "US thing" :)
Posted by s_howl | December 10, 2009 12:56 AM
Posted on December 10, 2009 00:56
That's quite possible. I've heard plenty of horror stories from around the 99-05 series of VW stuff. Almost always electrical in nature, and almost always caused by gremlins...
Most people I've heard or knew that had problems didn't just have one (well it might have been one, that repeated), they had it in the shop every couple of months for something.
And while it might have been something like the rear passanger window doesn't go down, it still leaves a bad taste when you are constantly bringing it in to get fixed.
(For the most part I heard very little issues with them leaving people stranded or blowing powertrains. If it did leave someone stranded it was usually due to an electrical system failure (like no power at all)).
Posted by brian | December 10, 2009 9:05 AM
Posted on December 10, 2009 09:05
To those posters who are wondering about VW's poor quality rep: please drive a vehicle made in Puebla. You will then understand.
Posted by Kawi | December 10, 2009 11:01 AM
Posted on December 10, 2009 11:01
In reference to VW's reliabilty issues (or perceived issues), VW when re-introducing the "Rabbit" back to the US decided to have those vehicles built in Germany to maintain quality (at a big expense to VW) because the Mexican plant had such a bad reputation. My coworker worked at a VW dealership during the "infamous" 1999-05 period and would relay horror stories of cronic VW maladies. (his dealership kept a stockpile of 1.8L blocks because of numerous premature failures), window regulators, problems with the EGR system on diesels (carbon would build up slowly within this system until owners would notice that the engine would have no power), interiors that would rattle and fray prematurely. Now, I was hearing this and trying to decipher if this was factual or hyperbole. However, I have had several friends that have sworn off the brand because of their experiences. It is enough to give me pause.
Posted by longdxcommuter | December 10, 2009 7:30 PM
Posted on December 10, 2009 19:30
My brother has a 2003 TDI Jetta because of a long commute. I like the car for it's premium materials and the leather seats have held up exceptionally well for 173k miles, so VW has tried to justify it's price points. Unfotunately, like just about every other VW I've talked to, his car has so many small problems. Numerous electrical issue, it blows tail lights very frequently, BOSE radio knobs crack and fall off every winter, exhause manifold cracked at 110k. One thing I notice is that most VW owners just suck it up and deal with the maintenance, apparently they like the cars enough to just deal with it....similar to how I think BWM often has issues but the owners have money to just fix them and like the driving experience enough to stick with them.
I'm not buying a VW anytime soon, or even test driving them, for the money they want there's just too many nicer alternatives.
Posted by thetruth | December 11, 2009 6:06 AM
Posted on December 11, 2009 06:06
This is pretty interesting to me... Especially considering the Suzuki announcement a month or so ago when several people were commenting about how it looked a lot like a VW on the front end... HMMM
Posted by fantumm | December 14, 2009 11:13 AM
Posted on December 14, 2009 11:13