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by Tim Beissmann

The relationship between Volkswagen and Suzuki has become strained to the point that the two are no longer talking to each other, despite being linked to a significant operational alliance.

Suzuki Chairman, Osamu Suzuki, told Bloomberg the situation had deteriorated to the point where there was no communication between the two global carmakers.

“Volkswagen is not talking to us,” Mr Suzuki said. “Volkswagen keeps talking to the media, but not to us directly.”

“We have no plans to talk to them.”

The feud heated up in March when the German auto giant published a report describing Suzuki as an “associate” of which it could “significantly influence financial and operating policy decisions”. Suzuki didn’t take kindly to Volkswagen’s heavy-handed attitude.

Volkswagen secured a 19.9 per cent stake in the Japanese manufacturer in December 2009 in a deal worth 222.5 billion yen ($2.7 billion).

In theory, the partnership was a win-win. Volkswagen would have a foot in the door in emerging markets like India where Suzuki’s small cars dominate, while Suzuki would benefit from the Volkswagen Group’s more advanced technology.

The two had plans to cooperate on hybrid and electric vehicles, but almost two years after the deal was signed, there has been no external evidence that any joint projects have even been started.

In a column he wrote in Japan’s Nikkei newspaper in July, Mr Suzuki said he had conducted an extensive review of Volkswagen’s technologies but had not found any he wanted to adopt, and instead chose to buy diesel engines from Fiat SpA in Italy.

Despite the tough talk from the man at the top, executives from both companies have both confirmed it is their intention to repair the relationship and get the alliance back on track.

Time will tell. How do you think the situation will pan out? Do you think Suzuki is better off without Volkswagen, and vice versa? Let us know your thoughts in the comments section below.




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