[aaggoswami]

Very bad move.
I had read earlier where VW had indicated that they are interested in Suzuki's stake. But a few months ago, Suzuki head said that its not true. What is going to follow will not be good for Suzuki.

Suzuki is known for its small cars, very reliable cars. The small 4X4 from Suzuki are also well known. Fiat Panda's 4X4 comes from Suzuki. So overall, Suzuki is a nice independent car maker. Suzuki has remained indepnedent and profitable since long. With Swift they made reasonably good inroads in EU. SX4 helped for the same as it was based on extended Swift platform ( and hence lots of part sharing ). SX4 was quite good and even a Fiat version of SX4 followed. At the end of the day we can say that Suzuki was doing good.

Now comes this news. A manufacturer not known to give reliability as far as electrical go wants a stake in Suzuki ( which is quite reliable ). Next, low cost of ownership in long term is something VW cannot boast of. All the Japs beat VW here ( read that in old issue of Motor Trend ).
What will Suzuki get ? Off late Suzuki had caught up with international players on almost every front. Add to that good engines.

Now Suzuki will lose everything. They will get VW diesels that drink engine oil, cars will not be as realiable as they are. VW does not understand the market segment on which Suzuki thrives.

VW had issues with electricals, engine ( dual mass flywheel ) and transmission ( PDK ). What will they give Suzuki ?

Its bye bye Suzuki. With this, the first great Indian car brand Maruti will also die.

EDIT : If VW interfears with Suzuki's way of R&D, Suzuki cars will lose their USP.
I wonder why VW is interested in Suzuki. Best option for Suzuki was to end up in a tie with Toyota.

[srishiva]

I guess you can look at it both ways. Suzuki CEO is a worried man and requires someones help and hence he agreed to the deal.
VW does not understand the small car segment which is a good reason for VW to buy Suzuki.
Suzuki needs VW diesels. Just imagine if SX4 comes with a clean diesel unit and how people will like it.
Suzuki has improved the quality of Fiat. Now imagine if it can do something to VW's quality/reliability. Not that its that bad.

[carlosTHEjackal]

All the exchanges of technology and use of expertise can happen only if VW has a controlling stake in Suzuki. Also VW is not looking to improve Suzuki after taking the stake. In fact VW is concentrating on taking the expertise of Suzuki's small car market and success road-map to VW.

So all speculation of Suzuki getting good diesel engines, or Suzuki getting other parts from VW can be only after VW flourishes in India. Until then, Suzuki needs to wait and watch.

[motor spirit]

its a win-win situation for both
a) VW has a great desire to become the world no-1 by 2018 . However im sure they would like to reach that mark as soon as possible. So their wish ,IMO will be achieved in the next 2-3 years .Aslo in emerging markets like india, Buying a stake in suzuki makes a great sense.
b) for suzuki, they have always tied up with manfacturers ( GM, Fiat ) for technology or access to certain markets . They will need others support for better technologies . they are not a big fish either . so it makes sense for suzuki to sell stake to VW . However they should not let VW completely gobble them

[gomzi]

VW has now bought a stake in Suzuki. I just read this on TOI

Japan's Suzuki Motor said on Wednesday it will sell a 19.9 percent stake to Volkswagen for $2.5 billion and use half the proceeds to buy shares in the German automaker, as the two firms form a formidable force in the auto industry.

[vivprasad]

I really do not understand. VW and Suzuki are so different!

[fx45]

how about a DSG box in the next gen swift?

[tsk1979]

I think Suzuki went into this deal for 2 reasons
1. Pay of debts
2. Diesel engines.
Currently their deal with Fiat is very restrictive. for example they cannot sell the GV diesel over here.
With VW in the fray, they will have more number of diesels to chose from.
Besides that Suzuki has said that they will use $1bn for R&D purposes. This means they can even look to developing cheap low end diesel tech with help from VW.
As for why VW came in, maybe they wanted a stake in the budget hatch segment, and high volume segment which Japanese companies rule.
They may also get some stellar smooth japanese petrol tech for their low end hatches.

[canonball]

This is out of blue I wonder why now? Have I missed anything is Suzuki in trouble? Strange bedfellows

[StarVegabond]

1. There are not many cases where European and Japanese JVs have worked.

2. 19.9% stake = Arms length distance in legal terms = no participation in management decisions, only Advisory role that too only supervisory board not in Board of management

3. Suzuki has said they would use half of the cash to buy shares of VW which means they will also hold very minor holding in VW. This is basically for two reason, park the cash for avoiding tax, secondly there are not many major investments planned by Suzuki in next 1-2 years horizon to invest the cash.

4. I see this as a foundation to discuss several co-operation possibilities for the future viz. Small Car for Europe, Leverage on each others Distribution and Service network in Non Competing markets, Lower cost components and Sub Assemblies from Japanese vendors, Some high end cars sourcing from VW by Suzuki etc.

5. Knowing Japanese and German, it will take a while before things start to move on the ground.

[aaggoswami]

Originally Posted by vivprasad

I really do not understand. VW and Suzuki are so different!

Add me to the list. I am also deeply shocked.

Originally Posted by fx45

how about a DSG box in the next gen swift?

And then the gearbox will fail. Spare cost will equal the cost of Alto.

Originally Posted by tsk1979

I think Suzuki went into this deal for 2 reasons
1. Pay of debts
2. Diesel engines.
Currently their deal with Fiat is very restrictive. for example they cannot sell the GV diesel over here.
With VW in the fray, they will have more number of diesels to chose from.
Besides that Suzuki has said that they will use $1bn for R&D purposes. This means they can even look to developing cheap low end diesel tech with help from VW.
As for why VW came in, maybe they wanted a stake in the budget hatch segment, and high volume segment which Japanese companies rule.
They may also get some stellar smooth japanese petrol tech for their low end hatches.

1) Suzuki was never in deep finiancial trouble. I had posted some facts in Kizashi thread that Suzuki has capacity to remain indepnedent and was the only manufacturer not to be deeply affected by recession.

2) Fiat is not a good partner ( no intention of starting a war, please ). They are delaying technology transfer. The deal was for 1.3,1.6,1.9. Suzuki then resorted to Peugeot diesel for SX4 1.6D in EU. Also VGT were not allowed. Suzuki should have given two turbo to 1.3 for higher power. It was Fiat that was in need of cash so they sold diesel tech to Suzuki and got SX4 hatch as Fiat Sedici under badge engineering. Both are built at Suzuki's Hungary facality. Suzuki supplied 4X4 for Panda.
Thats a different story.

Suzuki has capacity to build good petrol motors that are efficient and reliable. We have witnessed this. They were developing a 2.0 twin turbo diesel also.

This might be good enough reason but VW does not have good range of diesels. Its Peugeot, Merc, BMW, Fiat that have good diesel tech. VW scores in high capacity diesels like the one we see in V12 Q7 diesel.
But not in small capacity.

Their motors with Supercharger and Turbo need very high quality fuel which in impractical for developing nations.

All I want to say is that Suzuki will not be getting motors, of high standards they ( Suzuki ) currently have. Show me one small 1.2 from VW as good as K12M we have here with Indian fuel.

Suzuki has commited a blunder that will prove suicidal. VW does not have any strength as far as good powertrains go, not for developing countries. Large engines are different story.
Suzuki is a loser now.

Originally Posted by canonball

This is out of blue I wonder why now? Have I missed anything is Suzuki in trouble? Strange bedfellows

Suzuki was not in big trouble. Suzuki had the strength to remain indepnedent. Now we will never see Kizashi on Indian roads as VW will kill Suzuki slowly and steadily.

Also Honda, Yamaha and Kawasaki, you have a reason to rejoice. Suzuki will now not come up with great super bikes.

The head at VW is too dominating.

@mods : Sorry for long post, but I am deeply hurt by this news.

[snaronikar]

As heard from the the news channels, this is generally to share design, leverage distributors and servicing & manufacture environmentally friendly and fuel efficient cars. MSIL Chairman's is also informing that he is not sure whether this will have any impact on Maruti Suzuki India as of now. We need to wait and watch what these two auto majors are upto and their future plans...

[Thad E Ginathom]

Originally Posted by vivprasad

I really do not understand. VW and Suzuki are so different!

Wouldn't you have said that about VW and Skoda before they became part of the group.

As far as I can remember, the only car in UK that had a worse reputation, in UK, in those days, was the Russian Lada, whereas VW, in those days, people used to say, "the parts are expensive, but don't worry about that, you won't need any".

[MCR]

As reported in "are we Indians making a compromise by buying Suzuki" thread, Suzuki is doing well only in India. Thanks for the factors like first entrant in the market etc. Globaly their operating profits have dropped considerably in 2008. Whereas VW is very strong and dominant in Europe. As far as MSIL is concerned, it has more to loose than gain, because VW cannot share any technology since it has none specific to India and also it will be competing directly with Swift with the launch of Polo.
Suzuki is the loser in this deal IMHO.

[Meer]

Originally Posted by MCR

As reported in "are we Indians making a compromise by buying Suzuki" thread, Suzuki is doing well only in India. Thanks for the factors like first entrant in the market etc. Globaly their operating profits have dropped considerably in 2008.

A bit off topic, but I think on the contrary Suzuki is doing very well - ofcourse mainly due to Indian market. So, I dont think it would be fair to say Suzuki is not doing well, especially looking at their profit numbers.

BBC NEWS | Business | Suzuki triples profits forecast