Suzuki Says Joint Projects with VW to Start Next Month
By Brendan Moore
Suzuki Chairman Osamu Suzuki told reporters yesterday that work on joint projects with Volkswagen AG, its new partner, will start as early as January 10.
Speaking at the launch of the new Alto minicar in Tokyo, Suzuki said the companies know what they need from each other, and should start working together in earnest after the New Year holidays are over.
The Indian newspaper Economic Times quoted an executive at Maruti Suzuki India as saying that Suzuki and VW would develop a small car with a target price of $4300-$5400 USD.
This statement brought a stern rebuke from Suzuki, who stated, “Suzuki Motor has authority over this, not (Indian subsidiary) Maruti.”
The Indian executive, Maruti Chairman R.C. Bhargava, then backtracked on his remarks, commenting that he is not the one talking with VW, and stating that he merely suggested that the small car might be an option.
“What I have said is, one of the possibilities is that Volkswagen could outsource a small car from us,” he told Reuters.
Well, sure, that’s what he meant to say. So it’s good that all of that has been cleared up.
Suzuki is the acknowledged leader in small cars worldwide, which is why VW has maintained such an ardent pursuit of the company. Suzuki actually makes money on its small cars, but will make even more with some extra economies of scale provided by the tie-up with its new partner, VW.
The VW-Suzuki partnership has produced large ripple effects felt by other manufacturers, in particular Toyota. ‘If the VW-Suzuki partnership works as envisioned, there is no guarantee that Toyota will be a leading player in the small-car market in emerging economies, the importance of which is growing by the day,’ the Japanese economic daily Nikkei said recently.
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