Curtains for the much hyped Volkswagen-Suzuki alliance?

When Volkswagen and Suzuki planned to join hands, many eyebrows were raised and along with it talk of the German auto major Volkswagen swallowing the relatively smaller Suzuki in due course of time. This is exactly which had ticked Suzuki executives off and ever since, Volkswagen and Suzuki have never really gotten around to work together and share technological expertise and branding as the alliance had originally envisaged.

Volkswagen-Suzuki Alliance in tatters

In what could be the tipping point of the already strained relationship between Volkswagen and Suzuki, Suzuki chairman Osamu Suzuki made this acerbic statement that has plenty of potential to upset more than a few people at Volkswagen. Mr Suzuki said, and we quote,

Volkswagen is not talking to us. We have no plans to talk to them.

If this purported statement by Mr Suzuki has some substance to it, then there’s a fat chance that it is Game over for the two brands’ alliance, out of which much was expected. Volkswagen was to use Suzuki as a front to make inroads into the small car market of one of the world’s fastest growing car market, India, while Suzuki was to gain access Volkswagen’s technological expertise in the electric and hybrid car engine space.

In another move that has taken Suzuki further away from Volkswagen, the former has chosen to engage Italian automaker FIAT to supply more of its engine, which are to power future Suzuki and Maruti Suzuki models. Quite frankly, Volkswagen’s 1.2 Liter, 3 cylinder TDI common rail turbo diesel engine simply cannot hold a candle to the superior performance and economy of the Fiat 1.3 Liter Multijet engine and hence, it seems increasingly evident that Suzuki prefers FIAT diesel engines to that of Volkswagen’s.

With this state of affairs, it is highly likely that the Volkswagen Suzuki alliance could crumble, that is if it hasn’t already crumbled. Expect an official announcement from either of the automakers soon. Amongst other things, another alliance that hasn’t done to well is the Tata-FIAT JV, which has come a cropper, mainly in the joint dealership venture of Tata-FIAT. While Tata seems to be selling a reasonable amount of cars, Fiat India is really struggling, to the point that Fiat India has just announced that it is all set to open independent dealerships to salvage Brand FIAT in India.

Via TheEconomicTimes

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September 8, 2011 | By Jay Prashanth · Tags:

Comments

2 Responses to “Curtains for the much hyped Volkswagen-Suzuki alliance?”

charan on September 8th, 2011 8:05 pm

Hello

I have suggestion for Suzuki and FIAT.
why dont Suzuki and FIAT joins hands together and sell their cars together.
Suzuki will get all the Diesel engines of FIAT 1.3 MJD,1.6 MJD, 1.9 MJD and fiat new 1 litre Diesel Engine.
Fiat can sell the cars using Maruti Suzuki showrooms and Service centre. FIAT can say goodbye to TATA-FIAT JV.
fiat new 1 litre Diesel Engine can be put in Estillo,WagonR and A Star
1.6 MJD in SX4
1.9 MJD in Kizashi and assemble the car as CKD if they have constraints against manufacturing the car locally and price it closely to Corolla Altis
Maruti will hold its share of 50 percent of the market
Rohit on September 15th, 2011 8:31 pm

Hi Charan,

Good suggestion, but Maruti would get a big threat to its throne in Indian car market if they do that.
Fiat cars are also one of the best in world & are a direct competition to Maruti’s. I don’t think Fiat would be benefited with such a pact as the same thing is happening to them via Tata Motors.
Other companies are more interested in using Fiat technologies than anything else.
Only saviour for Fiat India is to come up with their own showrooms & service centres simultaneously, with new powerful models & Gorilla marketing! Only then can they re-claim the Indian market which they once used to dominate. Wake up Fiat! Love us or hate us, you can’t ignore India. ;)