[hrmanju1]

Right time for this piece of news. I am expecting a huge ad in TOI on this announcement especially on the usage of A*S*S by VW and technology transfer etc. This will make people link VW with Suzuki.

Come Jan, Polo is launched. People identify this news and maybe have a good thing for VW initially. Not sure how this will end up. Very interesting.

[mayjay]

vw sure seems to have a lot of cash lying around. First the USD 5.8 bn on the Porsche stake and now 20% of Suzuki for USD 2.5 bn.

[Berj79]

Originally Posted by mayjay

vw sure seems to have a lot of cash lying around. First the USD 5.8 bn on the Porsche stake and now 20% of Suzuki for USD 2.5 bn.

VW is on a role, most of their brands are doing very well in europe & US, now time to attack asia

[Thad E Ginathom]

I'm getting very confused between two news items. Must be the only person in the world to have ever confused Suzuki with Porsche!

[SkyWalker]

hmmm... VW is making its aggressive intentions pretty clear. With a 20% stake in Suzuki (and more to come), they might have easy access to service from Maruti service centers too!

Suzuki will not really get anything from this deal. Petrol technology for small cars is already good at Suzuki. Maybe the diesels. But then VW is too smart to give them a diesel which might impact their cars in India.

I see VW share of Indian market shooting up in next few years. Suzuki is a different story - its being attacked on all fronts - from nano to the i10, and now more cars are coming in - Figo & Micra.

[aaggoswami]

Originally Posted by SkyWalker

1) hmmm... VW is making its aggressive intentions pretty clear. With a 20% stake in Suzuki (and more to come), they might have easy access to service from Maruti service centers too!

2) Suzuki will not really get anything from this deal. Petrol technology for small cars is already good at Suzuki. Maybe the diesels. But then VW is too smart to give them a diesel which might impact their cars in India.

3) I see VW share of Indian market shooting up in next few years. Suzuki is a different story - its being attacked on all fronts - from nano to the i10, and now more cars are coming in - Figo & Micra.

1) Suzuki service centers. VW is not able to fully understand the Indian small car market Suzuki caters to. And VW is too dominant to let Indian operations run with current standards and protocols.
VW will induce the change, which IMHO will not be positive. Cost of spares which are low for Suzuki cars in their respective segment will rise if VW takes makes its now trademark dominant actions.

What does Suzuki benefit from in this ?
VW gets access to Suzuki A.S & S. network in India.

2) Exactly. VW does not have good small capacity motor in both diesel and petrol. The TSI need very high quality fuel. Small car tech, leave it to Suzuki. VW does not specialize in this.

And do you think that they will give diesels to Suzuki so that they can put them up in their small car range ? VW small car's sales will suffer then.
Again, what does Suzuki get ?
VW gets small car petrol motors and if need be, cars.

3) Still Suzuki was able to sustain. And they are doing quite well considering the rising competition. They have new Swift coming, two new small cars, a new WagonR ( can be updated also ) and a car near 800. They were working in their own way.

Internationally with Kizashi which received good reviews all over, Suzuki were doing good enough to sustain themselves. Add to that their two wheeler division that was up there with the best.

And then what about current deals with Fiat, Nissan ? Suzuki supplied " badge engineered " SX4 to Fiat and small cars to Nissan in both Japan and EU.

Originally Posted by Thad E Ginathom

I'm getting very confused between two news items. Must be the only person in the world to have ever confused Suzuki with Porsche!

Ferdinand Piëch had an aim of getting 12 brands under him. We see this plan being executed very aggressively.

Originally Posted by Berj79

VW is on a role, most of their brands are doing very well in europe & US, now time to attack asia

Attack Asia or Inida ? China is one country where VW has significant presence. Indian market is a place where VW never got success. They came in with their own thinking and attitude ( as most of Europeans ) and could not succeed. VW brand itself is not doing good IMHO.

[SkyWalker]

Originally Posted by aaggoswami

3) Still Suzuki was able to sustain. And they are doing quite well considering the rising competition. They have new Swift coming, two new small cars, a new WagonR ( can be updated also ) and a car near 800. They were working in their own way.

True! Love them or hate them - Suzuki has managed their cars and their markets brilliantly in India so far.

[muralisk]

This is good news as there is a great deal of consolidating in auto industry and would benefit the end customer. Here are some extracts from Reuters:

News of backing from the world's No.3 carmaker sent Suzuki shares up 3.5 percent in a weaker Toyko market. Volkswagen rose as much as 2.9 percent in Germany and were up 1.5 percent by 1153 GMT, the leading gainer among German blue chips.

VW, which is also the No.1 carmaker in China, the world's largest auto market, would provide Suzuki the technology to make the hybrid and electric cars it lacks in its line-up.

"In partnership with Suzuki, the VW Group can take a big step forward in the compact car segment, particularly in the emerging markets in Asia," Winterkorn said. "In turn, Suzuki can benefit from our experience with efficient and environmentally friendly drivetrain and vehicle technologies

The fact that shareholders and investors see this partnership as a mutually profitable one and I feel it does lot of good for customers.

[MCR]

There could be more than that meets the eye in such deals. VW will get a foothold in Japanaese car market with this deal. This will be something like Renault-Nissan. Also heard that Suzuki will be renamed.

[ajmat]

This is a good deal if the following happens

VW do not integrate Suzuki into its fold totally - Seat only now is showing its potential. Skoda is okay. Porsche will take time. Suzuki is a totally different culture

VW make Suzuki the future centre of excellence for small cars.

VW re-engineer the larger Suzuki carsfor quality - Kishashi and GV

Suzuki needed more cash hence deal. VW wanted a quicker track into India. Expect VW to tap Suzuki to source parts from India

It is a good deal from an India persepctive

[navan49]

I am not having any idea in the stakes etc. Now can any one tell whether we the suzuki owners will be benfitted in any manner on this purchase.

[Soumya_Ramesh]

VW is going to up its ante in emerging markest like Brazil and India and also in established markets of east asia with its stake in suzuki. suzuki's revenue is nearly one third of VW and i will not be surprised if at the end suzuki gets completely under VW's umbrella. Aay to go for VW and am sure part of the deal would be to take sales and service efforts of VW cars by suzuki. One thing for sure, indian customers will be delighted with more options.

[diffsoft]

I think it is good news for current and prospective customers of both companies.

The arrangement between Suzuki and VW is bound by a "a framework agreement" and an investment of $ 2.5 billion for a 20% stake will be reciprocated by Suzuki investing half that amount to buy VW stake (a much lower stake).

From reading the posts I get a perception that this is being thought of as a takeover - which it is not. To me it seems like an arrangement between 2 companies - to provide technology and market expertise that is strengthened by equity investment. In the Nissan Renault case, Renault holds 44.4% of Nissan and hence complete management control will have followed. That is not the case here.

This is what Financial Times said, "VW said on Wednesday it and Suzuki would “co-operate while respecting each other’s independence as a stand-alone entity”. People close to VW said that the two companies would co-operate, but there were no plans to embark on an integration process."

VW has demonstrated such independence in the past (with Lamborghini etc) and hence no reason to believe why it can't in the future.

The good news is a possibility of getting German cars with Japanese reliability. That would open a lot of wallets for VW (almost certainly mine)

Cheers,

[pacman2881]

Interesting read on the matter at BL-

The Hindu Business Line : VW pact with Suzuki opens new roads in India

The Hindu Business Line : VW, Suzuki could create auto powerhouse in India

Going by these, the retails efforts will be exclusive and partnership will be at the manufacturing and design level.

One possibility explained in the first article which I find too speculative is this in bringing in Fiat as a supplier to VW- The article says
"What could actually emerge, instead, is the possibility of VW sourcing petrol engines from Maruti in the interim and even using the Fiat diesel engine if it means that this will help in its cost-control efforts. This, obviously, would mean that the Italian automaker will enter the picture too as a supplier. Fiat manufactures the same 1.3 litre diesel engine with Tata Motors at its Ranjangaon facility near Pune and has already made it known that it is open to supply contracts with other carmakers."

I doubt if VW will make such an effort for India alone when they have their own engines.

Originally Posted by navan49

I am not having any idea in the stakes etc. Now can any one tell whether we the suzuki owners will be benfitted in any manner on this purchase.

I don't see any benefit for existing Suzuki owners while future owners may benefit if VW engines get into Suzuki's which in itself will take considerable time.

[joseph5600]

This is good for Suzuki, as they could get their cars with VW engines. So when Maruti Suzuki comes with the VW engines with a lower price tag, it is defenitely going to kill the VW car sales, same what happened to Palio MJD when the Vista was launched.