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Marriage & Divorce Between Volkswagen & Suzuki

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Marriage & Divorce between Volkswagen & Suzuki
INTRODUCTION
In December 2009, Japan’s Suzuki Motor Corp. and Germany’s Volkswagen AG (VW) signed a comprehensive alliance agreement. This agreement was a symbol of the common goal shared by both automobile giants – to create one of the top automobile groups in the world.
Under their agreement, Volkswagen acquired a 19.9 percent stake in the Japanese carmaker. Suzuki sold its shares to Volkswagen for a staggering 223 billion Yen. Almost half of this money was spent by Suzuki to buy a 1.49 percent stake in Volkswagen. At that point of time, Toyota was the world’s leading manufacturer of automobiles and Volkswagen had been struggling to get to the top for quite some time. Volkswagen's Chairman Martin Winterkorn said at a press conference in Tokyo – “We want to be the world's No.1 automaker by 2018 and Suzuki's cooperation will accelerate the achievement of our goal".
Suzuki’s latent ambition was to become the prime automaker in Japan. It intended to rely on Volkswagen to develop eco-friendly hi-tech vehicles like electric cars and gasoline electric hybrids – an area in which it was lacking technical know-how. Suzuki had also envisaged designing & developing diesel engines in partnership with Volkswagen.
They agreed to share technologies and cooperate with each other in a number of critical areas. VW agreed to provide its larger-vehicle technologies to Suzuki and in turn the latter agreed to provide VW access to its small-displacement motors.
While the future partnership goals generated curiosity among industry observers, both the auto manufacturers botched to arrive at an agreement on any of their proposed goals. Clearly, the alliance was an important strategic step for both the auto-manufacturers. But unfortunately it could survive for only 20 months. Since August 2011, there were signs that the partnership was

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