Suzuki no longer an "associate" of VW - deal turns sour again


VW have certainly upset Suzuki's apple cart with the latest development in the spat between the two automotive giants, seeing VW demote Suzuki from its "associate" list.

The Japanese firm now officially appears under VW's "other holdings". Although it sounds fairly trivial, the move is actually pretty significant and could see the agreement collapse completely, acting as a marker that starts the sparks flying between both companies.
The original agreement between the Japanese and German automotive titans saw the two firms swapping new technologies, with VW donating its super-efficient engine and powertrain know-how for Suzuki's expertise in making small cars.

But according to Suzuki, VW broke the terms of the deal by being selfish with its technology and now the Japanese giant wants all of its 19.9% stake back after VW fanned the flames in its annual report, stating that it could "significantly influence financial and operating policy decisions" at Suzuki.

In typical management speak VW added, "the opportunity to exert notable influence upon Suzuki is, for the time being, no longer available," before moving Suzuki into its "other holdings" list.

So with handbags (or should that be glove boxes?) at 10 paces between the two automotive firms, who are not doing anything to reconcile relations, the outcome looks set to be a brutal fight.

VW has dismissed Suzuki's accusations that it violated the agreement by not sharing technology and is resolutely digging its solid German heels into the ground claiming it won't give Suzuki its shares back.

There aren't many toys left in the proverbial prams of either party and with the predicament looking like it could boil over at any minute since Suzuki served VW with a legal 'notice of breach' after attempting to smooth over the relationship, prepare for the bloody legal battle to begin.
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