The tale of the hungry giant called Volkswagen continues! Days after acquiring majority stake in Porsche, Wolfsburg has announced the purchase of 19.9% of Suzuki for US$2.5 billion. The deal, which is billed as “a comprehensive partnership” will also see the Japanese manufacturer invest up to half of the sum received into buying VW shares. This cross buying arrangement sounds similar to the Renault-Nissan Alliance. Both companies will establish a cooperative relationship while respecting each other’s independence as a stand-alone entity, says VW.
“In terms of product portfolio, global distribution and manufacturing capacities, VW and Suzuki ideally complement each other. The 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. 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,” the press statement reads.
This partnership has real potential to upgrade the standard of motoring in developing markets. Think about it; Suzuki is a small car expert and VW is among the best in making efficient, frugal and clean drivetrains, and the merger of these qualities could bring about a revolution greater than the Tata Nano.
Conveniently, Suzuki is the market leader in India with its Maruti brand and VW is deep rooted and hugely successful in China, so both sides have something great to offer the other. We reckon that the fruits of this marriage will be really sweet – how about a Maruti up! or a next gen Swift Sport with a 1.4 TSI engine?