Suzuki wants end to VW alliance

2011-11-18 12:54

Tokyo – Suzuki Motors said today it was terminating its partnership with Volkswagen (VW) and threatened to take the matter to an international arbitration if the German company refused to sell its 19.9% stake in its smaller Japanese partner.

The two carmakers are at odds over claims by Suzuki that VW had not granted it access to certain technologies, in breach of a promise made in a 2009 partnership deal.

Relations soured further after VW called Suzuki an “associate” in its annual report.

“Today Suzuki terminated the partnership with VW,” company chairperson and chief executive Osamu Suzuki said.

“I am disappointed that we have to take this action but VW’s actions have left us no choice. They have continued to refuse our attempts on numerous occasions to resolve these issues through negotiation.”

A spokesperson for VW said in a statement that the German carmaker wanted to hold on to its stake in Suzuki.

Suzuki wants VW to sell back its stake, either directly to Suzuki or to a designated third party.

The Japanese manufacturer first decided to end the partnership in September after the German company emphasized its influence over its Japanese “associate” in its annual report.

VW bought the shares in December 2009 to boost its presence in the Indian market for compact cars.

If VW refuses to dissolve the partnership, Suzuki said it “will begin arbitration, in order to re-establish the genuine independence of Suzuki”.

The German company has not changed its position since it refused Suzuki’s first request to end the alliance in September, the Nikkei business newspaper reported.

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