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Old 18th July 2011, 17:16   #31
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Default Re: Suzuki not interested in collaborating with VW in India

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Originally Posted by vina View Post
you are forgetting that in the same deal Suzuki also picked up a double digit stake in VW - usually a protection against the kind of "something BIG" that you are insinuating.
Vina,

I do not remember Suziki getting VW stake as part of the deal. Could you point me to a source for the same?

A <20% stake in Suzuki could purely be for investment purpose, but we know that is unlikely as far as VW is concerned. Most likely, VW is interested in Suzuki's 'efficient' models and technologies, while Suzuki is playing hardball on what they want in return.
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Old 18th July 2011, 17:35   #32
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Default Re: Suzuki not interested in collaborating with VW in India

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Originally Posted by NikhilB View Post
Vina,

I do not remember Suziki getting VW stake as part of the deal. Could you point me to a source for the same?

A <20% stake in Suzuki could purely be for investment purpose, but we know that is unlikely as far as VW is concerned. Most likely, VW is interested in Suzuki's 'efficient' models and technologies, while Suzuki is playing hardball on what they want in return.

I had found it on internet (may be the news link that was posted by somebody, may be google) - about 60% of the money that VW paid for the 20% of suzuki was used by Suzuki to buy VW stocks. That is why Suzuki was left with "only" $1billion in the deal.


EDIT: You can see the press release here: http://www.autoblog.com/2009/12/09/o...-tie-the-knot/


"Suzuki intends to invest up to one half of the amount received from Volkswagen into shares of Volkswagen."



Last edited by vina : 18th July 2011 at 17:37.
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Old 18th July 2011, 17:53   #33
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Default Re: Suzuki not interested in collaborating with VW in India

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Originally Posted by vina View Post
I had found it on internet (may be the news link that was posted by somebody, may be google) - about 60% of the money that VW paid for the 20% of suzuki was used by Suzuki to buy VW stocks. That is why Suzuki was left with "only" $1billion in the deal.


EDIT: You can see the press release here: Officially Official: VW and Suzuki tie the knot


"Suzuki intends to invest up to one half of the amount received from Volkswagen into shares of Volkswagen."

Thats

What I meant was I heard about them plannin to invest in it but never found a press-release stating that they actually did, so still have my doubts on that leg of the transaction.

Today's comments indicate to me that Suzuki will make VW pay for the tech it wants. They are making it amply clear that VW doesn't have any interesting/unique tech that can be offered to the Japanese as an exchange.
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Old 18th July 2011, 19:22   #34
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Default Re: Suzuki signals rift with Volkswagen over multi-billion-dollar partnership

This Suzuki-VW collaboration is falling apart on global stage also.
As you rightly said the Indian relationship fallout is in direct co-relation with the global fallout.
Suzuki collaborating with Fait for diesel engines inspite of share cross holding with VW speaks a lot in itself. I think its mainly due to the culture difference between the Japs and Germans.

The Japs in general carry on with trust or long proven relation even if it means -ve financial impact but if something threatens their pride/very existance or in terms of "controling stake or influence" must have driven them mad.

Last edited by RemingtonSteele : 18th July 2011 at 19:51.
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Old 18th July 2011, 19:47   #35
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Default Re: Suzuki not interested in collaborating with VW in India

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Originally Posted by NikhilB View Post
Thats

What I meant was I heard about them plannin to invest in it but never found a press-release stating that they actually did, so still have my doubts on that leg of the transaction.

Today's comments indicate to me that Suzuki will make VW pay for the tech it wants. They are making it amply clear that VW doesn't have any interesting/unique tech that can be offered to the Japanese as an exchange.

The press release I had quoted was from before the time agreement was finalised. Another release after the agreement was done legally, speaks of Suzuki actually using half of the money to pay it's debts and another quarter to buy VW shares - found that one after writing the previous post.
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Old 18th July 2011, 22:07   #36
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Default Re: Suzuki signals rift with Volkswagen over multi-billion-dollar partnership

To quote from World business, finance, and political news from the Financial Times - FT.com

Quote:

The Japanese were angered when VW listed listed Suzuki in its annual report that month as an “associate”, defined as a company which VW is directly or indirectly able to “significanty influence financial and operating policy decisions”. VW said the report was compiled according to international accounting rules.

Osamu Suzuki, chairman of the Japanese carmaker, warned earlier this month that the German automaker had lost sight of the original agreement that the two company’s relationship would be one of an equal partnership.

“When Suzuki and Volkswagen tied up, we had a basic agreement that we would both be independent and equal partners,” Mr Suzuki wrote in a blog for the Nikkei newspaper. “Perhaps, because there is a difference in the size of the companies, as time goes by they might have come to think that they wanted to take control.”

The outspoken Suzuki chairman also said that his company had studied the German group’s technology and found that “Volkswagen has no technology that Suzuki wants right now”.

In comments that appeared to dismiss the importance to Suzuki of the VW relationship, he added that “if there are technologies that we lack, there are many companies both within and outside Japan with whom we have deep relations so we could seek help from such companies
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Old 19th July 2011, 11:31   #37
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Default Re: Suzuki signals rift with Volkswagen over multi-billion-dollar partnership

The article below refers to Suzuki manufacturing VW vehicles in India. Any takes?

Will India Match China's Manufacturing Might? - India Knowledge@Wharton

Quote:
Through a partnership between Suzuki and Nissan, Indian subsidiary Maruti Suzuki manufactures the Pixo model compact car for sale in Europe, according to Mayank Pareek, Maruti Suzuki India's managing executive officer for marketing & sales. The Indian auto major is likely to start making vehicles for Volkswagen soon; in 2009, the German carmaker bought a 19.9% stake in Suzuki for US$4.5 billion. "The scope of the tie-up is under discussion between Suzuki and Volkswagen," adds Pareek.
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Old 19th July 2011, 12:11   #38
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Default Re: Suzuki signals rift with Volkswagen over multi-billion-dollar partnership

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The article below refers to Suzuki manufacturing VW vehicles in India. Any takes?
This article is an old article - A background to the alliance which just fractured yesterday.
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Old 19th July 2011, 13:39   #39
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Default Re: Suzuki signals rift with Volkswagen over multi-billion-dollar partnership

Not entirely shocking.

VW (being multiple times bigger) probably wanted to control Suzuki and perhaps make a Skoda out of it (just another subsidiary in VW group). Suzuki being Japanese found that insulting and wouldn't have any of it.

Don't know who it will hurt more.
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Old 19th July 2011, 14:24   #40
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Default Re: Suzuki signals rift with Volkswagen over multi-billion-dollar partnership

More news:

Volkswagen-Suzuki Alliance
First it was Volkswagen CEO, Mr Martin Winterkorn who expressed the difficulties that the Volkswagen-Suzuki alliance was facing due to what he called at that time, “cultural differences”. Then, quite recently, we had Suzuki CEO Osamu Suzuki talk about how the Volkswagen-Suzuki partnership wasn’t working as well as he’d expected it to.
Now, in the boldest revelation of sorts, we have Suzuki’s executive vice president Yasuhito Harayama, openly declaring that the Volkswagen-Suzuki alliance will not work until both the companies are equal partners. In growing sign of discord between the two automakers, here’s what Mr Yasushito Harayama had to say about the Volkswagen-Suzuki alliance.
We can’t cooperate unless we are equal partners. If necessary, we will form other alliances like the one with Italy’s Fiat. We don’t think we would have been able to survive in our minicar business and the emerging markets if Volkswagen had a significant influence on our finances and business management.
Clearly, Suzuki executives are in no mood to work under the management structure of Volkswagen as is evident by Mr Harayama’s statements. Therefore, expecting a major strategic shift in Suzuki’s Indian operations with Maruti, its biggest money spinner yet, might not happen as Suzuki clearly doesn’t want to play second fiddle to Volkswagen.
Volkswagen bought a 19.9% stake in Suzuki in a $2.5 Billion deal while Suzuki planned to invest half of that amount to become an equal partner in the alliance by taking a 2.5% stake in Volkswagen. Currently, Suzuki with its Indian partner Maruti, has an overwhelming marketshare in the Indian car market, at a time when Volkswagen is still taking baby steps to slowly increase its market share in the same market.

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Last edited by n_aditya : 19th July 2011 at 15:30.
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Old 21st July 2011, 10:31   #41
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Default Will it be Fiat-Suzuki instead of VW-Suzuki. Time might answer soon

Read a very interesting article. VW-Suzuki ties turing sour day by day & Suzuki tying up with Fiat for more diesel engines . May be one day we might see FIAT cars in India running with K-Series engines !

Shaky VW-Suzuki alliance may scuttle India story

With tension brewing between Volkswagen and Suzuki, the India script for this global alliance may just turn awry

Nearly 20 months ago, VW and Suzuki got into an equity crossholding deal which promised plenty. The German carmaker was hopeful that it would translate into a slew of compact cars for India while Suzuki was guaranteed access to its ally's large array of diesel engines. Over the last few weeks, it is getting increasingly apparent that the duo is tiring of the partnership which has yielded nothing on the ground yet.

According to auto industry observers, it may be a tad premature to write an epitaph though the spark is clearly missing. Media reports have cited a cultural mismatch as the prime trigger

As far as India is concerned, Suzuki (via Maruti) remains a force to reckon with in the small car segment. Its growing need for diesel engines is expected to be met by Fiat from its Ranjangaon plant near Pune, which clearly means that VW's services are not required in this department.

Does this signal the possibility of a new alliance emerging between Suzuki and Fiat? Speculation has been rife that the two will now team up for diesel engines and also pool their skills in fuel-efficient compact cars, the road for the future.

With Chrysler also in its kitty, it will be interesting to see how Fiat leverages Suzuki's presence should this turn into an equity-based partnership

From VW's point of view, a separation with Suzuki may be of little consequence even in markets like India where it is a relatively late entrant.

The German carmaker has been investing heavily in building its brand here and is generating good numbers for its Polo and Vento cars. It would also be looking at a long-term strategy where recent acquisitions like MAN will play a key role in India's commercial vehicle segment.

Incidentally, Fiat and Suzuki had a common ally in General Motors, although at different points in time.

The relationship between GM and Suzuki was so strong at one point that it was widely thought that the former would have a strong role in Maruti. Mr Osamu Suzuki, Suzuki Motor Corp Chairman, had hinted in 2000 that GM would be the natural ally in India by virtue of its (then) 20 per cent stake in his company. Govt stake Then, the Indian Government was a prominent stakeholder in Maruti and it was assumed that GM would step into this role once the company was privatised

Events took a dramatic turn soon thereafter when Daewoo was up for sale and GM snapped it when Ford, originally the highest bidder, backed out.

GM and Suzuki subsequently ended their promised alliance for India and parted ways at a global level too

As in the case of Volkswagen -Suzuki, a lot was expected from the alliance between GM and Fiat which had a similar crossholding model. Nothing came of it eventually and the divorce was inevitable.

Business Line : Companies News : Shaky VW-Suzuki alliance may scuttle India story
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Old 21st July 2011, 13:40   #42
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Default Re: Will it be Fiat-Suzuki instead of VW-Suzuki. Time might answer soon

If Suzuki does eventually tie up with Fiat, we can expect better after-sales for Fiat cars through MSIL dealerships (if the deal is like that) but that will mean sacrificing its own sales. Difficult situation this.
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Old 24th July 2011, 22:45   #43
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Default Re: Suzuki not interested in collaborating with VW in India

Achtung VW! Suzuki thinks VW is treating the company as a subsidiary with 19.9 % equity. So its not happy with the VW management techniques!
The whole world has only one Boss and he is pop singer Bruce Springsteen fondly called "The Boss".
VW is no boss and Suzuki says VW wants to be its boss, though both are separate entities and cater to different segments! The Fiat-Suzuki chemistry is working fine on the other hand.
More on this link here:
Suzuki losing patience with VW, reports say - The Local
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Old 18th August 2011, 10:45   #44
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Default Re: Suzuki not interested in collaborating with VW in India

Here is another article on the same topic:

Suzuki fed up with Volkswagen, may partner with Fiat instead:

Quote:

In 2010, Volkswagen purchased 19.9 percent of Suzuki, and the two have been working together in the form of a self-described comprehensive partnership. Apparently, "working together" means different things to the two automakers, however, because neither side is thrilled with the Japanese-German automotive tie-up. So much so, that Suzuki may be looking to take its talents to Italy.

Suzuki currently has a deal with Fiat, in which the Japanese automaker supplies its SX4 crossover for rebadging as the Sedici in Europe. There are reports that Suzuki is looking for ways to expand its relationship with Fiat, yet we've heard no word on whether the Italian automaker is interested in getting any cozier at this point.

Why is Suzuki ready to move on from Volkswagen? The automaker reportedly wants to get its hands dirty on some of VW's North American assembly facilities, but that hasn't happened yet. On the flip side, Volkswagen wants a piece of the Indian car market. Suzuki has strong roots planted in that market thanks to its partnership with Maruti. Both sides have clearly been expecting more out of this relationship, yet neither is happy. Suzuki has a lot more to lose, however, so expect to see it make a move sooner rather than later.
Source:Suzuki fed up with Volkswagen, may partner with Fiat instead
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Old 9th September 2011, 08:19   #45
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Default Re: Suzuki not interested in collaborating with VW in India

Suzuki-VW not on speaking Terms, seeking other people!

Volkswagen-Suzuki Alliance Unraveling Over Control of Driver


"You know the script you meet somebody new and all cylinders seem to be firing in perfect harmony. You decide to see more of each other, consider moving your relationship to the so-called next level. You exchange keys. And that's when things start to go sour.

The symbolic exchanging of keys between Volkswagen and Suzuki took place back in December of 2009, and the souring has been taking place ever since. Considering that VW purchased 20 percent of Suzuki as part of the deal, you might think that calling Suzuki an "associate" and stating that it has the power to "significantly influence financial and operating policy decisions" of the Japanese automaker would be pretty darn factual. Suzuki saw things otherwise.

The signs of a growing conflict showed up shortly after hands were first shaken. More recently, Suzuki has expressed more and more discontent with its partnership, even going so far as to make a deal with Fiat for diesel engines instead of seeking them from Volkswagen, itself a leader in modern diesel technology, and CEO Osamu Suzuki claimed VW had no technologies his company was interested in acquiring.

A report from Bloomberg indicates that the two automakers are now not even speaking to one another, though both companies claim they want to extend an olive branch and take another look at the partnership. "

VW and Suzuki still are, and will continue to be, two independent companies with different business models from different cultural environments, Hans Demant, VWs coordinator for international projects, said in an e-mailed statement. The cooperation is marked by highest respect and acceptance."

Cheers!
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