Suzuki Motor Corp. announced that it has reached an agreement with VW that will give the German auto manufacturer a 20% stake in Suzuki for $2.5 billion.
News service Reuters reported that Volkswagen, the largest carmaker in Europe, has agreed to buy a 19.9% stake in
Suzuki Motor Corp. for $2.5 billion. VW and Suzuki plan to jointly develop vehicles for emerging markets and aim to challenge the global leader in vehicle production, Toyota Motor Co.
The move gives Volkswagen a stronger presence in two of the emerging world markets, India and China. Maruti Suzuki India Ltd., reportedly makes half of all cars sold in India, while China is set to surpass the U.S. this year as the world’s largest car market.
Suzuki is Japan’s fourth-largest carmaker and is third globally in motorcycle production. How this new alliance will affect Suzuki’s motorcycle production, which accounts for 16.9% of Suzuki’s net sales, remains to be seen.
The arrangement will give VW access to Suzuki’s small car and motorcycle technology while Suzuki will benefit from Volkswagen’s engineering advancements in hybrids and electrics. Electric motorcycles and scooter technology has been advancing at a torrid pace and there was even an
all-electric race on the Isle of Man for the first time this past year.
VW’s name has been mentioned recently as a purported suitor for motorcycle manufacturers like KTM and Ducati. Former VW CEO Ferdinand Piech, a self-professed moto-junkie, has voiced his regrets for not buying Ducati back in 1985 when he could have acquired the Italian motorcycle manufacturer at a bargain price.
Suzuki is the tenth brand the automotive manufacturer has teamed with. Besides Volkswagen, other investments by the German company include Audi, Bugatti, Bentley, Lamborghini, SEAT, Skoda, Scania and other Volkswagen Commercial Vehicles. It also just made a move last week to acquire Porsche AG.
