Suzuki threatens VW to use its hybrid technology

Suzuki Motor Corp, the Japanese auto major has recently accused Volkswagen of not letting the former to access the hybrid technology as promised during the initiation of the deal. The two-year JV between the two auto giants, Suzuki Motor Corp and Volkswagen is beginning to show signs of falling apart for a while now. Apparently, Suzuki Motors has threatened the German manufacturer with a legal notice to allow the use of the hybrid technology, failure of which, Volkswagen will have to sell out the Suzuki’s stakes in the alliance. Only during the last month, Volkswagen Auto had accused the Japanese auto manufacturer of violating the agreement by seeking the diesel engine supply from the Italian manufacturer, Fiat. According to the pact, Suzuki Motors is required to depend on the German auto major for the diesel engine supply. The Joint Venture between the two companies had shaped up with Volkswagen buying 19.9 % of Sukuzi’s shares for 1.7 billion Euros.

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Yasuhito Harayama, the Executive Vice-President of Suzuki Motors had informed that they are awaiting the response from the German manufacturer, without which they might have to consider other options to get the situation in hand. The feud has reached to an extent, where the Japanese brand has even thought of buying out its stake worth $1 billion equaling 1.5% from Volkswagen. Suzuki Motor Corp is not quite content with the way the things are moving as the auto major has not been able to gain the hybrid engine access as it has envisaged. Without the help of the German brand VW, who is an established player in the hybrid technology; Suzuki Motors does not have the means to produce the same on its own. However, Harayama has clearly mentioned that Suzuki Motors is certainly not the injured party in the deal as they are quite capable of developing new technology without any external help and it’s in the interest of both the parties to find a feasible solution at the earliest. 

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Apart from the Suzuki - VW deal, Suzuki had apparently suffered a major crisis during its deal with GM, which finally cracked up in 2006. On the other hand Suzuki Motors had been successful in maintaining its relationships with Fiat for the diesel engine supply and with Nissan for producing low-cost cars. Things seem to be working for Suzuki Motors in terms of a deal with Porsche, which is underway and a truck manufacturing deal with MAN and Sweden's Scania.