Friday, 14 October 2011

Suzuki's ultimatum to VW : Share technology or split - Fire intensifies between the two



Suzuki in a press conference has given an ultimatum to the VW group "Either share the Hybrid technology with Suzuki" or "Split".

Suzuki Motor Corp accused Volkswagen of breaching a partnership pact by withholding hybrid technology it promised to share, pushing their two-year-old alliance on the verge of disintegration.

"The whole point of the partnership was to gain access to key technologies, such as those for hybrids and environment technologies," Executive Vice President Yasuhito Harayama said at a news conference in Tokyo. "If VW can't honour that, it must return Suzuki's shares immediately."

Suzuki's Harayama also said that if VW doesnot share the hybrid technology, it must sell its stake in Suzuki. VW bought a 19.9 percent interest in Suzuki for about 1.7 billion euros ($2.3 billion) in January 2009. At Thursday's closing price that stake was worth $2.4 billion.

In 1998, Suzuki joined a strategic partnership with General Motors , which took a 17.4 percent stake in the Japanese firm. That unravelled in 2006 when the U.S. car company sold most of its stake as it scrambled for cash amid ballooning losses.

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