Suzuki Alto

A German magazine reported last week that Volkswagen is looking to take up a 10% stake in Japanese carmaker Suzuki. Taking up stake and collaborating with the Japanese company in various areas such as network and product collaboration will allow Volkswagen to enter the Indian market with more success than they currently are having. Suzuki currently dominates the Indian market through the local JV, Maruti Suzuki.

The small little cars that Suzuki and Daihatsu are so good at building at seems to be a secret art that no one else can master. Most of the time the cars come out too cramped as there is not very efficient use of space, or they end up being too costly to manufacturer and price at the appropriate price tag that it needs to have.

Suzuki could benefit from Volkswagen’s technologies such as various fuel-saving tech such as FSI, TSI, TDI diesel and even hybrid tech, and Volkswagen could definitely use Suzuki’s access in India, and perhaps its K-car platforms in case it wants to do something smaller than the NSF (the Up! concepts – future Lupo).

Either way, investors seem to think positively of such a deal, as Suzuki shares went up by nearly 7.7% before settling down up 5.5% at 2,195 Japanese Yen.