What in the heck are VW and Suzuki doing? Have they been taking management seminars from Greek and US politicians? Nothing comes of public bickering in what is a DOOMED relationship. A lot of press reports seem to put VW in the driver’s seat, not surprising since they’ve been on a roll with success lately.
I see it a bit differently, I remember first meeting Osamu Suzuki briefly in April 2001 when he tied up with Nissan on Japan minis, and he has not lost a step. Suzuki is at the top of the mini-game (K or Kei Car) which has come to be a large part of the domestic Japan market. His real gem is his position in India and ASEAN markets where VW is in a quandary. Toyota, Nissan, Renault and GM have struggled to build down a B-segment car for India, with no one getting it right on the first or second try, but Suzuki has the tools to build up from its dominant mini position to be the dominant maker in India’s future. VW saw this, and recognized a change to repeat their great position as an early mover in China.
Short of either Suzuki getting a new President (and there is only one way I see that happening — God forbid) or a public act of contrition by Winterkorn (not waiting for that one either) this thing is dead, and if VW wants to tie up its capital with 20% stake, it won’t get much in return. 20% gives you very little with an unwilling partner, and even in the eventual change of management, there still remains that fact that VW has not demonstrated its ability to work half a world away.
Sadly, it reminds me of the relationship between DaimlerChrysler back in 2002-3 when they tried to “work with” Mitsubishi. There are ways to integrate, whether it’s a partnership or a veiled takeover.
Here’s a list of the highest profile ventures in the past 15 years, you all know them.
Daimler + Chrysler (merger of equals?)
Renault + Nissan (Alliance of partners) + Samsung + Dacia + AvtoVAZ + DongFeng Ltd (anyone else, oh Yeah, Daimler – Chrysler – Mitsubishi)
DaimlerChrysler + Mitsubishi (whatever?)
Porsche + VW (OK, kind of like marrying your 1st cousin) (takeover, but by whom?)
Ford + Mazda + Volvo + Jaguar + Aston Martin (“We’re not a car company, we’re a brand company”)
GM + Saab + Hummer + Daewoo + Fuji Heavy + (and four are left standing)
Before someone adds, I know that there are a half dozen more as the Chinese OEM’s have picked up the spinoff’s from Detroit. That’s for another day! And I am glad I don’t have to add: GM + Ford (remember that one!)