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by Tim Beissmann

Volkswagen AG is moving closer to a taking up a 20 percent stake in Suzuki Motor Corp, with three direct sources admitting the deal is imminent.

One told Reuters that an announcement could come as early as this week and that it may just be the first step in the process, with VW possibly looking to expand its share to one-third or more.

It is believed a 20 percent share in Suzuki – Japan’s fourth-largest vehicle manufacturer – would be worth around 250 billion yen (AUD$3.12 billion).

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Neither VW nor Suzuki is commenting on the proposed merger at the moment, but VW has previously said it was keen to gain small car know-how from the from the baby car master that is dominant in India.

News of the merger was made even more intriguing today with the announcement by VW that it will produce its new Up! range of small cars in Bratislava, Slovakia, from 2011.

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 The Up!, Space Up! and Space Up! Blue will join the Touareg, Audi Q7, Porsche Cayenne and Skoda Octavia on the production line, increasing capacity to 400,000 vehicles per year.

“The launch of production which is scheduled for 2011 will add 1500 new jobs to 7800 jobs already at the plant,” VW chief executive, Andreas Tostmann, said.

Total investment in the plant is estimated to be AUD$619 million.




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