Suzuki plans to protect independence after favorable outcome in battle with VW image

Following a four-year skirmish with Germany’s Volkswagen AG about a failed partnership agreement with the Japanese automaker, Suzuki plans to protect its newly won independence.

Suzuki Motor Corp. has seen its shares go up after the recent announcement that Volkswagen would be forced to allow the Japanese carmaker to buy back its shares from the German rival. Arbitrators decided to grant the win to the small Japanese manufacturer and allow the termination of the 2009 deal that failed to deliver any positive cooperation between the two groups. VW well of its 19.9 percent in Suzuki, at around 463 billion yen ($3.8 billion) when taking into account last week’s closing price. “The past six years have been a very valuable experience,” commented Chairman Osamu Suzuki for reporters on Sunday. “I came to realize there are companies different from us,” and independence is now a “precondition” for future agreements.

The Japanese manufacturer, specialized in delivering small and affordable cars, is nowhere near the mass of global competitors such as Volkswagen and this heightens the pressure on the automaker to protect its dominance in India – where it’s the leading manufacturer. But it also needs to fend off from the rising costs of developing vehicles that need to be ever greener if it wants to achieve its goal of lifting annual revenue to 3.7 trillion yen by March 2020. Analysts, investors and industry observers believe the company has enough cash at hand to repurchase the stake from VW and it would need to concede to future partnerships with its rivals – though mergers could easily be avoided.

Via Bloomberg