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VW Plans to Keep Suzuki Stake

October 18, 2011
2 min to read


FRANKFURT—Volkswagen AG said on Monday that it intends to keep its 19.9 percent stake in Suzuki Motor Corp. despite persistent calls from its smaller Japanese peer to dissolve their tie-up, indicating that a dispute between the two auto makers is unlikely to be resolved anytime soon.


Volkswagen said it wouldn't comment on any talks the two hold on the future of their partnership. "The discussion between both parties will be exclusively conducted internally.," Europe's largest auto maker said in a statement, reported The Wall Street Journal.

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Volkswagen's remarks are intended to reduce the number of headlines generated in recent weeks by public clashes over the details of the cooperation agreement they signed in 2009. The public spat highlights the difficulties large cross-border deals can suffer because of cultural differences.


Volkswagen acquired its Suzuki stake at the end of 2009 for roughly €1.7 billion ($2.36 billion). It hoped to benefit from Suzuki's expertise in the important small-car segment and from its large presence in India.


Suzuki said on Friday it had sent a notice to its German counterpart claiming Volkswagen had breached the terms of the companies' alliance. Volkswagen rejected Suzuki's allegations, insisting that it had always stuck to existing contracts.


Volkswagen, in turn, has accused Suzuki of breaching their agreement by signing a deal earlier this year to purchase certain diesel engines from Italy's Fiat SpA.


Despite their agreement, the Japanese car maker has been unable to gain access to Volkswagen's core technologies, Yasuhito Harayama, an executive vice-president, claimed Friday at a news conference.

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"For Suzuki, this was the biggest goal of the alliance. But this hasn't materialized," Mr. Harayama said. He declined to disclose other breaches claimed by his company.


Osamu Suzuki, chairman and chief executive at Suzuki, said Volkswagen must return the shares in his company if it doesn't allow access to its technology.


Mr. Harayama said on Friday that if Volkswagen remains reluctant to discuss the dissolution of the alliance, the Japanese company "may have to consider further action." He declined to say whether the company would take legal action.

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