Volkswagen has taken its holiday shopping spree to excess, with the purchase of a 19.9 percent stake in Suzuki and 49.9 percent stake in Porsche. The German automaker is on a wild tear to achieve its ambitious goals of dramatic sales increases. What sounded like a misplaced boast at auto shows a couple years ago is now much closer to reality.
VW spent $2.5 billion on its piece of Suzuki Motor Corp., gaining access to the Japanese manufacturer's small-car expertise and market access to India. With its reputation for engineering well-executed small cars with fit and finish befitting higher-priced vehicles, VW has much it can offer Suzuki, as well.
CEO Osamu Suzuki said he is not interested in being VW's 12th brand, as quoted in Automotive News, referring to the relationship as a partnership, rather than acquisition. His comment does highlight that VW has a large portfolio, which the automaker has successfully supported with powertrain and platform sharing. It would be a natural to see this continue with Suzuki. Conversely, Suzuki is buying a 2.5 percent stake in VW.
The arrangement gives Suzuki a major partner to take the place of General Motors, after several ties amid the global automotive crisis.
Automotive News notes that for the first six months of 2009, combined sales from Suzuki and VW worldwide best Toyota by a significant 850,000 vehicles.
Another partnership is brewing, with PSA/Peugeot-Citroen and Mitsubishi Motors Corp. exploring cooperative opportunities. Plus, the industry awaits the fate of Hummer and Saab, both of whom are being considered for purchase by international organizations.
As the global economy struggles to recover, it is clear there are dramatic moves afoot that will reshape the manufacturing landscape for many years to come.
