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Volkswagen, Suzuki partnership saga set to end

The rift between Volkswagen and Suzuki, initiated by the companies' failed partnership and subsequent share dispute, is set to be resolved with hearings at the ICC International Court of Arbitration in London due to begin next year.


Automotive News reports Suzuki is confident of a successful outcome and is hopeful the use of arbitration will see Volkswagen return the 19.9 per cent stake in Suzuki it acquired as part of a 2009 partnership agreement that went sour.

Suzuki's vice president of business development Yasuhito Harayama said, "The agreement with Volkswagen is already terminated, thus, Volkswagen does not have the legitimacy to keep on holding Suzuki shares."

In November 2011 Suzuki ended the partnership on the grounds that Volkswagen had not provided the technology promised as per the agreement.

Volkswagen responded in a statement saying, "We are extremely disappointed that Suzuki has taken this step. There is no legal foundation whatsoever obliging us to surrender our shares. Volkswagen will continue to hold its stake."

Only days after this reaction, Suzuki made the decision to take the dispute to the International Court of Arbitration in London.

Volkswagen maintained that Suzuki broke the terms of the agreement when the Japanese manufacturer went to Italian brand Fiat to source a 1.6-litre diesel engine to power its SX4 compact SUV.

Sources told Automotive News that Suzuki has offered to buy back the shares that Volkswagen reportedly paid 1.7 billion euros ($2 billion) for back in 2009 when the deal was done, for current market price or about 2 billion euros ($2.4 billion).

Earlier this week Volkswagen finalised the acquisition of the remaining 50.1 per cent stake in Porsche Automobil Holding SE’s car making business for 4.46 billion euros ($5.44 billion).

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