Suzuki was hoping to pick up some of VW's technical know-how for vehicles like its Kizashi.
Despite an increasingly tense war of words that could land the erstwhile partners in court, Volkswagen says it has no intention of selling off its stake in Japan’s Suzuki Motor Corp.
The two makers have been engaged in an increasingly noisy public spot, in recent weeks, Suzuki officially serving Volkswagen AG with a “notice of breach “in relation to the companies’ Framework Agreement, which was signed in 2009.
Complicating the situation, VW now accuses Suzuki of breaching the agreement itself by agreeing to purchase diesel engines from Volkswagen’s Italian rival, SpA.
“The discussion between both parties will be exclusively conducted internally,” said a statement from Volkswagen, Europe’s largest maker and currently the second-largest worldwide behind General Motors.
The relationship between VW and Suzuki was formed in 2009, the German maker hoping to gain more understanding of the microcar market – a Suzuki specialty — purchasing its 19.9% stake in the Japanese maker for $2.36 billion.
Suzuki, meanwhile, had hoped to gain access to VW’s technological know-how, according to Executive Vice President Yasuhito Harayama.
“For Suzuki, this was the biggest goal of the alliance. But this hasn’t materialized,” Harayama said during a news conference last Friday.
The notice of breach requires VW to remedy numerous issues spelled out in the companies’ Framework Agreement, according to Suzuki officials.
Suzuki officials said they were particularly disappointed Volkswagen has failed to share the hybrid technology as promised in the two-year old framework agreement. The notice follows a period of prolonged efforts by Suzuki to progress its relationship with VW, as agreed at the partnership’s inception, they said. The notice of breach was filed in Tokyo but the legal ramifications of the announcement remain unclear.
It appears Suzuki is ready to dissolve the alliance, but VW’s latest statement indicates it would like to avoid that step.
“I remain disappointed that we have not received what we were promised,” said Suzuki’s Chairman and CEO, Osamu Suzuki. “If Volkswagen will not allow access it must return Suzuki’s shares. We are very encouraged by Suzuki’s consistently solid performance. We remain on track for profitability and are excited about the potential for future growth,” Suzuki said.
The breakdown of the VW alliance would be the latest setback for Suzuki. The automaker had previously tried to ally itself with General Motors but that partnership also collapsed after GM, once reliant on Suzuki’s small car know-how, purchased the bankrupt assets of Korean small car maker Daewoo.
Paul A. Eisenstein contributed to this report.