Room for one more Suzuki to become the VW Group's eleventh brand
12-08-09, 06:18 AM
#1
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Room for one more Suzuki to become the VW Group's eleventh brand
http://www.automobilemag.com/green/r...nd_suzuki.html
Room for one more Suzuki to become the VW Group's eleventh brand
The Volkswagen Group is good at many things: engineering, design, build quality. Only cost is still an issue. At the bottom end of the market, brands like VW (and Seat and Škoda in Europe) are struggling to fend off leaner competition.
What to do? Early in 2009, corporate strategists zoomed in on Mazda, which was recently divorced from Ford. But they concluded that Mazda was too big to swallow, that there was too much product overlap, and that very small cars are not Mazda's forte. In a parallel move, VW put out feelers toward Suzuki. Up until 2008, the Japanese manufacturer, which built 2.4 million passenger cars and 3.5 million two-wheelers and ATVs that year, was tied to General Motors. But GM's financial crisis forced it to sell off what was left of its 20 percent stake. The current market value of Suzuki is about $9.5 billion. Considering the fact that VW's absorption of Porsche is going to cost about $23 billion, a staggered takeover of Suzuki might be the only way the Germans can shoulder the deal.
What exactly are the benefits for Volkswagen? There are three key assets: synergy effects related to the development and assembly of small and very small cars; instant access to cost-efficient production sites in Japan and in important emerging markets like China, India, and others; and access to leading motorbike/scooter/quad/basic-urban-transportation technology, a fast-growing segment in which the VW Group is currently not active. VW and Suzuki are expected to share parts, including three-cylinder engines, small-displacement diesels, automated-manual gearboxes, dual-clutch transmissions, and still-to-be specified alternative drivetrains. With this move, Suzuki becomes the eleventh - and presumably final - automotive brand in the Volkswagen empire.
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12-09-09, 09:30 AM
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As you can see from the image above depicting Osamu Suzuki, chairman and CEO of Suzuki Motor Corp. and Martin Winterkorn, his counterpart at Volkswagen AG, the two auto companies have agreed to link arms. Volkswagen has properly announced that it has "reached a common understanding to establish a close longterm strategic partnership" with Suzuki Motor Corporation. The union means VW will buy 19.9% of Suzuki, then Suzuki will spend half the money they just received from Volkswagen reciprocating by buying VW shares.
Beyond that, Suzuki gains access to VW technology and the comforting warmth of a hugely profitable big brother. Volkswagen gets a nearly turn-key solution to boosting its small car development and piggybacks on Suzuki's presence in India and Southeast Asia. Suzuki, and of course, VW, will remain independent, but unofficial word suggests that VW might increase its stake to 33% or more at some point down the road, which could shift the balance of power.
VW's press release is after the jump, and there will be a press conference and webcast (you'll need a user name and password to watch) at 5 p.m. with more details.
As you can see from the image above depicting Osamu Suzuki, chairman and CEO of Suzuki Motor Corp. and Martin Winterkorn, his counterpart at Volkswagen AG, the two auto companies have agreed to link arms. Volkswagen has properly announced that it has "reached a common understanding to establish a close longterm strategic partnership" with Suzuki Motor Corporation. The union means VW will buy 19.9% of Suzuki, then Suzuki will spend half the money they just received from Volkswagen reciprocating by buying VW shares.
Beyond that, Suzuki gains access to VW technology and the comforting warmth of a hugely profitable big brother. Volkswagen gets a nearly turn-key solution to boosting its small car development and piggybacks on Suzuki's presence in India and Southeast Asia. Suzuki, and of course, VW, will remain independent, but unofficial word suggests that VW might increase its stake to 33% or more at some point down the road, which could shift the balance of power.
VW's press release is after the jump, and there will be a press conference and webcast (you'll need a user name and password to watch) at 5 p.m. with more details.
12-09-09, 10:28 AM
#11
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GM all over again. On the other hand, VW has been talking about acquiring a motorcycle brand for a very long time. Seems like they won't need to partner with KTM after all.
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