Volkswagen Ready to Buy Slice of Suzuki ‘Within Weeks’

Volkswagen is poised to buy a large stake in Suzuki, the Japanese carmaker whose mini-cars dominated several emerging economies and comprise more than half the vehicles on the road in India.
People familiar with the talks, which may lead to the German carmaker sinking more than 300 billion yen into Suzuki, expect an announcement on the capital tie-up before the end of the month. Volkswagen may push the alliance further if it seeks to buy a controlling stake in the Japanese company next year.
The move would be Volkswagen’s first big investment in a Japanese rival and has echoes of a deal being negotiated between Peugeot Citroen, of France, and Mitsubishi Motors, the struggling Japanese carmaker.
The move is understood to be entirely non-hostile, contrary to recent comments by Osamu Suzuki, the 79-year-old patriarch of Suzuki, who denied any talk of new alliances with overseas groups. Analysts have been speculating for some months that Suzuki represented one of the most attractive automotive assets in Asia for a potential buyer.
Suzuki, with its strong pedigree in motorcycles and scooters, has sought to make its mini-cars and vans the first vehicle that drivers choose as their economies shift from two to four wheels. A number of South-East Asian nations, including Vietnam and Indonesia, are considered to be close to the “tipping point” at which a nation of motorcyclists becomes a nation of motorists.
Despite its success in the mini-car niche, Suzuki found itself in the wrong alliance three years ago when General Motors, its previous partner, began to stumble. Volkswagen, meanwhile, has a long-established focus on emerging markets, having broken into China some years before its Japanese rivals.
If Volkswagen did buy Suzuki—and, critically, its Indian Maruti Suzuki unit—the combined group would be close to matching Toyota in scale.