It goes both ways: Suzuki to take a stake in Volkswagen

As part of a pact whereby Volkswagen became Suzuki”s biggest shareholder with a 20% stake, VW is looking to its own shareholders for individuals that may be willing to sell their shares to Suzuki, as agreed upon by the two companies as part of their comprehensive partnership plan.

With the auto industry facing an extremely dynamic climate, manufacturers are increasingly commonly striking agreements and entering into joint ventures with each other in order to get around the phenomenal costs associated with developing state-of-the-art powertrains.

“Suzuki is in a comprehensive alliance with Volkswagen. In every field including hybrid, diesel and electric cars, we will carry out joint development with them, or we will learn from them,” Suzuki said.

The two automakers will seek to produce a competitive small car as they see that as key to dominating the developing market. VW currently stands as the number one automaker in China while Maruti Suzuki India (a company owned 54% by Suzuki), dominates the Indian market with a share over 50%. Though the research and manufacturing arms of the companies will operate in sync with each other, sales networks will remain separate.

– By: Stephen Calogera

Source: Automotive News (Subscription Required)