Put this one firmly on the rumour mill, but a report from Reuters suggests that Volkswagen (VW) is exploring a co-operation deal with its Japanese rival Suzuki.
The theory behind the potential collaboration is that the German manufacturer’s position in the ultra-small car sector could be greatly enhanced. Currently, Suzuki dominates Japan’s 660cc mini-vehicle market along with Toyota unit Daihatsu Motor Company. So, collaboration could yield a new vehicle for VW.
According to the report, VW is looking to secure the co-operation deal by taking a 10 per cent stake in Suzuki. However, some investors are said to be wary about the deal with Kazuyuki Terao, the director at investment fund RCM Japan, telling Reuters that a capital tie-up will not stimulate demand – but if they are going to make cars together, as well as bring together production facilities and link their logistics, it could be beneficial to both parties.
Terao claims that Suzuki’s profits are coming mainly from India and Japan, whereas Europe does not have a big impact. Currently, Suzuki’s Indian unit Maruti Suzuki is that country’s largest car maker thanks mainly to the best-selling Alto mini car.
