Suzuki seeks end to partnership with Volkswagen

Suzuki Motor Corp. Chairman Osamu Suzuki on Monday said he plans to end his carmaker's turbulent two-year capital alliance with Volkswagen AG, citing concerns about independence and a dearth of technological exchanges and joint projects from the tie up.

The spry, 81-year-old Suzuki executive compared the breakup to a divorce and said the two companies should "say goodbye with a smile" instead of trading bitter accusations.

But much of a sometimes heated press conference early Monday in Tokyo was spent jabbing VW, which bought a 19.89 percent stake in Suzuki in December 2009. Osamu Suzuki compared their partner to a "ball and chain" and suggested the Germans weren't acting like grown ups.

Executive Vice President Yasuhito Harayama, who led negotiations with VW, compared the German automaker's accusations that Suzuki had violated their contract to a declaration of war. It was impossible to maintain healthy relations under such conditions, he said.

The continued acrimony came even as the Suzuki chairman demanded that VW sell its stake in Suzuki. In return, he said, Suzuki would offload its 1.49 percent holding in VW.

With the war of words between the companies heating up over the summer, VW said Sunday that Suzuki's decision to buy diesel engines from Fiat S.p.A. infringed on their partnership.

Suzuki executives claimed the decision to break with Volkswagen stems not from the Fiat accusation but from comments VW made to investors, starting with an April message in its annual report. It said the German partner could “significantly influence financial and operating policy decisions” at Suzuki. It also described the Japanese company as an “associate.”

Fiercely independent Osamu Suzuki took umbrage with being rolled in with VW's collection of global brands.

“I was very surprised,” he recalled. But he said the tipping point came July 29, when VW reportedly told shareholders it was putting the partnership under review.

VW spokesman Michael Brendel said the German automaker has no intention of selling or reducing its stake in Suzuki. He said Suzuki has broken the partnership agreement between the two carmakers by deciding to buy engines from Fiat.

When the VW-Suzuki deal was signed in December 2009, the companies said they intended to cooperate on technology, including hybrids and electric cars, and expansion in emerging markets. Almost two years later, no joint projects have begun.

By Hans Greimel- Automotive News