Suzuki-Volkswagen alliance – where it all went wrong

Suzuki Swift GLX Facelift 1

Yes, it has been quite some time since we last covered matters regarding the ill-fated Suzuki-Volkswagen tie-up but recent documents from within the Japanese carmaker, uncovered by Automotive News, have provided a more in-depth look into the unravelling of said partnership and the subsequent repercussions.

First, a bit of a history lesson for those who are less familiar with the whole issue. In December 2009, it was announced that the German automotive giant had purchased a 19.9% stake in Suzuki to gain insight into how the carmaker became adept at manufacturing compact budget vehicles for key developing markets such as India, Indonesia and the like.

In return, Suzuki would gain access to Volkswagen’s vast portfolio of technological and drivetrain-related know-how – of which the brand had hoped to incorporate into possible petrol-hybrid variants of its SX4 and Swift models. Also, Suzuki had planned to leverage on Volkswagen’s additional manpower.

With the relationship established, the conditions were set in stone. Volkswagen would reengineer the Suzuki A-Star (known as the Suzuki Alto in Malaysia) for sale in Europe and India while Suzuki would be assigned as the engineering hub for both companies’ compact cars – and that’s where the cracks began to surface.

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Soon enough, the Japanese carmaker began to doubt Volkswagen’s sincerity in upholding the integrity of the alliance – a suspicion made worse when the German giant, then under the leadership of Ferdinand Piech, insisted that it needed to increase its stake to 33% to “facilitate technology transfers.”

The Japanese marque, famous for its fiercely independent stance, refused to give in despite assurances from Volkswagen that the firm had no intentions in taking over Suzuki. The wound of distrust continued to fester with Volkswagen listing Suzuki as an associate and booking the firm’s profits on its annual report – said move was considered by Suzuki as a measure of Volkswagen imposing its control over operations.

In 2011, Suzuki chairman, Osamu Suzuki, publicly confronted Volkswagen, demanding an official split from the failed marriage – even going as far as offering to buy back Volkswagen’s share of the company. Despite a number of measures taken to help diffuse the situation, the two companies are still in the midst of a messy divorce with the International Court of Arbitration. A decision is due to be announced “soon.”

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Gregory Sze

An “actor” by training, Gregory Sze realised that he has had enough of drama in his life. Following his number one passion (acting was actually number two), he decided to make the jump into the realm of automotive journalism. He appreciates the simple things in life – a simple car with nothing but back-to-basics mechanical engineering and minimal electronics on board.

 

Comments

  • So was it a stroke of luck that Proton din go JV with VW? Maybe their Jedi powers sensed the dark side in them :-)

    Like or Dislike: Thumb up 38 Thumb down 2
    • VW and Suzuki Gaduh - The facts. on Aug 07, 2015 at 8:59 pm

      The Japanese are honourable people. They honour their agreements. The Germans are different. They are crooks who will cheat and colonise the world.

      here, Suzuki realised that VW has been bullshitting the world about their DSG. They could not take these lies and now they want to part ways. The Japanese cannot handle the lies of the DSG, especially the fact that DSG is inherently faulty and yet, it is being sold.

      Like or Dislike: Thumb up 29 Thumb down 26
      • Heng Lee on Aug 08, 2015 at 2:00 am

        “The Japanese are honourable people. They honour their agreements.”

        It seems, that the guys from Suzuki didn’t honour the agreements with their foreign workers? This is why Suzuki is infamous for the deadly worker riot in India in 2012 that left the Suzuki factory burned down and Suzuki’s HR manager killed? ;)

        http://in.reuters.com/article/2012/07/20/maruti-manesar-factory-unrest-idINDEE86J04L20120720

        Like or Dislike: Thumb up 15 Thumb down 1
      • BeemerFreak on Aug 08, 2015 at 10:04 am

        Rubbish the Japanese are honorable people. They are crooks that take advantage of the weak while portraying a noble image. Look at what they have done in WW2 and how they have tried to change history to make what they have done sound like it is rightous.

        Continuous visits of its leaders to the Yasukuni Shrine show their unrepentant and un-remorseful nature. They have never showed anyone any real respect expect themselves.

        The Germans on the other hand did not even allow the Nazi word or the Swastika sign to reappear. They have build on advance technology and strive to give the world the best, despite errors the persevere.

        And dont talk about economic assistance as well, look at what Germany has given Greece. If the same happen to Malaysia do you think Japan will give a damn.

        Like or Dislike: Thumb up 19 Thumb down 9
        • Both are crook of the crook, let them burn in hell.

          Like or Dislike: Thumb up 2 Thumb down 6
        • Littlebear on Aug 10, 2015 at 7:09 am

          Getman advanced technology during the WW2 such as the Tiger tank was revolutionary back then but proved to be unreliable. An engineer needs to be station with a Tiger to repair it constantly.

          Till now the Germans still emphasized on show casing their advance technologies without prioritizing reliability.

          Like or Dislike: Thumb up 2 Thumb down 2
          • Japanese technology in WWII was reliable, but their planes were so slow that all were shot down by the Yankees.

            Like or Dislike: Thumb up 2 Thumb down 2
          • Lim u idiot on Oct 12, 2016 at 5:15 pm

            U are an idiot Lim!!!

            WW2 Japan has the most versatile plane compare to US. Even the US Navy admits that Zero Mitsubishi are more dangerous than their Mustangs planes.

            Go read ur history !!

            Like or Dislike: Thumb up 0 Thumb down 0
      • Obviously (Member) on Aug 08, 2015 at 6:12 pm

        Much generalization here. Just like you can find lots of kinds of people in Malaysia, both good and bad, the same can be found among the Japanese and Germans.

        Like or Dislike: Thumb up 16 Thumb down 0
    • Albert on Aug 07, 2015 at 11:35 pm

      Now Protong will marry Suzuki and produce…..OMG…….I really doubt the Japanese will give us current engines and gearboxes.
      Remember,the Proton Saga got a 1970’s Orion Mitsubishi engine?
      It is a marriage doomed from the start cos of our kind of politics and (TUN said) lazy style of work culture.
      The Japs are not BODOH.
      The Divorce Court is the outcome.

      Like or Dislike: Thumb up 13 Thumb down 23
      • japslazy on Aug 08, 2015 at 9:29 am

        The Japs are stingy and quality now not like last time. People even die because of the low safety quality. That’s their lazy work products

        Like or Dislike: Thumb up 4 Thumb down 2
  • Aiman on Aug 07, 2015 at 7:48 pm

    With zero equity stake P1 must be
    fantasising getting any technology
    transfer from Suzuki.
    Deja vu on Mitsu/Saga era repeating
    again.

    Like or Dislike: Thumb up 11 Thumb down 16
    • Suzuki might be more open to P1. Especially when they dun have intention for hostile take-over.

      So take that, those doubters who bemoan the loss of JV with VW.

      Like or Dislike: Thumb up 18 Thumb down 5
    • Anti Jib on Aug 07, 2015 at 11:27 pm

      Wei bodo,

      It was VW start to make the mess.they want to increase their stake in suzuki like what they want to do in proton.

      An attempt of acquisition rather than technology transfer.no wonder both proton and suzuki did a jv since both have bad experience with VW

      Like or Dislike: Thumb up 21 Thumb down 4
  • ooooh…. smells like wikileaks….

    Like or Dislike: Thumb up 6 Thumb down 0
  • nabill (Member) on Aug 07, 2015 at 9:10 pm

    VW hav so much resources they really dont need anyone for anything…

    Like or Dislike: Thumb up 7 Thumb down 7
  • seancorr (Member) on Aug 08, 2015 at 12:17 am

    Well I think its common sense for anyone who wants to JV with VW…I mean VGM is buying up car brands as if its shopping in a supermarket so…there u have it.

    Like or Dislike: Thumb up 7 Thumb down 0
  • Stripper on Aug 08, 2015 at 5:37 am

    It should have been obvious to suzuki… But that raising the stake requirement to gain tech transfer is really low of VW. On the other hand, those who say ‘ohh bagus proton not jv with vw’ you just have to see how successful vw’s stable of brands is to see who is really at loss.

    Like or Dislike: Thumb up 11 Thumb down 5
    • Jurgen on Aug 08, 2015 at 7:39 am

      The VW lost more market share due to unsolve gear box problem. VW are the one losing the quality brand that Malaysian assumed VW is up par with Audi, BMW or Merc in reality VW is inferior quality.

      Like or Dislike: Thumb up 2 Thumb down 0
    • Then is it ok with you if it is only a case of’menang sorak kampung tergadai’?

      Like or Dislike: Thumb up 0 Thumb down 1
      • Stripper on Aug 10, 2015 at 9:44 am

        Even without VW your kampung already tergadai. Why stress over VW?

        Like or Dislike: Thumb up 1 Thumb down 0
    • If you think being relegated down the pecking order and instructed to be a low cost value, bottom of the barrel chain, with no identity, no pride, no chance to upmarket, receiving hand-me-downs out-of-production vehicles, is considered successful, then your definition of success just killed all the dictionaries ever existed.

      Like or Dislike: Thumb up 5 Thumb down 8
      • Stripper on Aug 09, 2015 at 11:43 am

        Proton is already all that without Vw’s intervention, john.

        Like or Dislike: Thumb up 8 Thumb down 5
      • American Suzuki Motor had to file for Chapter 11 bankruptcy reorganization in the US due to poor sales even before the agreement with VW?

        It stopped selling cars in the US in 2012?

        Like or Dislike: Thumb up 0 Thumb down 0
    • vwsucks on Aug 08, 2015 at 9:34 am

      What can VW offer? Problematic DSG? LOL

      Like or Dislike: Thumb up 4 Thumb down 2
  • Colin on Aug 08, 2015 at 7:21 am

    VW could have saved themselves a lot of money – by simply learning ONE lesson – LISTEN AND RESPOND TO YOUR CUSTOMERS! VW just don’t do it!

    Like or Dislike: Thumb up 1 Thumb down 1
  • Kenneth on Aug 08, 2015 at 1:17 pm

    What can Suzuki hope to gain from VW? Stupid DSG problems which VW can’t solve and don’t even want to admit?

    Like or Dislike: Thumb up 3 Thumb down 4
    • Obviously (Member) on Aug 08, 2015 at 6:09 pm

      Advanced engines, electric motors, batteries, well-developed large car chassis…many things they can gain besides their temperamental gearboxes. The current engine and gearbox options available in the Malaysian market are all pretty aged, but Suzuki seems to have their own way of doing things and I’m glad to see that they’re still innovating to some extent.

      Like or Dislike: Thumb up 2 Thumb down 1
    • Suzuki wanted VW’s TDI technology.

      Like or Dislike: Thumb up 1 Thumb down 0
  • Namaste on Aug 08, 2015 at 2:41 pm

    In India, where Suzuki has the biggest market share.
    They never had anything to do with vw, their cars have Fiat engines, no vw car has Fiat engines in India
    I don’t know what the deal was

    Like or Dislike: Thumb up 2 Thumb down 0
  • Well is better to stay single as some use you for a reasons

    Like or Dislike: Thumb up 1 Thumb down 0
  • blessing in disguise for both proton and suzuki, else they would be more cars breaking down. vag products are innovative from the outside but a nightmare to live with.

    Like or Dislike: Thumb up 3 Thumb down 0
  • You cant trust vw and you think you can trust proton? Seriously?

    Like or Dislike: Thumb up 2 Thumb down 1
 

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