Fiat may tie up with Suzuki if VW, Suzuki JV splits

The Joint Venture formed between Suzuki and Volkswagen back in 2009 is reported to be undergoing a stressful time, which is said to come to an end any time soon. The speculations are high that the alliance between Suzuki and Fiat might turn out to be strengthening in future, through cross-holding equity relationship or otherwise is yet to be seen. However, the observers are holding their own opinion that the stronger alliance between the both is a major possibility. The Joint venture between the German luxury brand Volkswagen and the Japanese auto major Suzuki took place in December, 2009 as cross-holding deal, where VW took hold of 20% stakes in Suzuki, while Suzuki managed to acquire just 2.5 % of luxury brand's shares.
 
The Joint Venture took place between the two auto brands to have their own share of benefit from each other. While Volkswagen hoped to gain from the joint relationship formed by making use of the back-end resources, Maruti Suzuki hoped to benefit from the Volkswagen's diesel engines there-by reducing its dependence on Fiat.
The breakup of the alliance might not hit MSI severely as the relationship had failed to yield anything of great importance in the last two years; MSI could easily meet its demand for diesel engines with Fiat's Ranjangaon plant.
 
Both Suzuki and Fiat have their own berth in the small car production. Fiat however, occupies a better place with its recent development of forming an alliance with Chrysler. The Fiat-Suzuki relationship might flourish with Suzuki as a potential customer for Fiat's diesel engines and Fiat might benefit with establishing a small car platform for the Europe and Asia-Pacific regions.
 
As for Suzuki, the Japanese auto major had a 10 year successful relationship with General Motors which did not turn out to be the way Suzuki had envisaged after the GM's acquisition of Daewoo. Maruti expected the JV between the General Motors and Suzuki to play a better role involving Maruti India.
The Joint-ventures between the automobile manufacturers are a continuous process in order to gain mutual benefits from both ends in the extremely competitive car manufacturing industry. Daimler AG was unable to have a successful venture with Chrysler, Mitsubishi and Hyundai. But the company had been successful in having an association with Renault.

The alliances in the industry are quite successful with a few examples to mention Mitsubishi in an alliance with Peugeot could result in with working on a global car together. Another example being, Reanult's association with Nissan in form of a cross-holding alliance has been quite fruitful so far.While, VW might not have been successful with its alliance with Suzuki, but had been fruitful with acquisitions of Skoda, Audi, MAN, Scania and Porsche at the latest. Volkswagen has also entered into the sub small cars manufacturing segment with upcoming Volkswagen Up!.