VW goes global

Updated

Yesterday's news that VW is buying a 19.9% share in Suzuki and that Peugeot is considering a tie-up with Mitsubishi, shows that car companies are responding to the economic problems by trying to become genuinely global.
The VW tie up is the most interesting. VW is determined to become the world's biggest car company (it is currently Number 2 behind Toyota) and Suzuki can give it a helping hand.

The minority shareholding means Suzuki sales will not count towards to the VW total, but Suzuki has a lot of useful expertise. While VW is huge in China, Suzuki is the biggest player in India and VW would love to replicate some of its Chinese success in the other big Asian market. The other thing that Suzuki brings to the market is expertise in city cars. Although not a big company in Japan for family cars, it is very strong in Kei cars, the 660cc city cars that enjoy tax advantages in Japan (and form the basis of the Indian Suzuki Maruti). VW is pretty lacklustre when it comes to city cars – the Brazilian-made Fox is VW's least competitive design. A VW with good city cars and a growing presence in India is a prospect to strike real fear into Toyota.

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