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Business

Volkswagen to buy almost 20% of Suzuki

©

Text by News Wires

Latest update : 2009-12-09

German car giant Volkswagen confirmed on Wednesday that it would buy a 19.9 percent stake in Japan's Suzuki by January 2010. In return, Suzuki will also acquire a stake in Europe's biggest carmaker.

AFP - The German car giant Volkswagen announced Wednesday it would buy a 19.9 percent stake in Japan's Suzuki Motor Corp. by January 2010, with Suzuki also acquiring a stake in Europe's biggest carmaker.

No financial details were released but a statement said Suzuki "intends to invest up to one half of the amount received from Volkswagen into shares of Volkswagen."

The two groups said they had "reached a common understanding to establish a close long-term strategic partnership" and a joint press conference was scheduled later on Wednesday in Tokyo.

The alliance could create a broad sales network in Asia since Volkswagen already has a strong presence in China, while Suzuki is a big player in India, the Japanese daily Yomiuri Shimbun noted.

"In terms of product portfolio, global distribution and manufacturing capacities, Volkswagen and Suzuki ideally complement each other," the statement added.

VW has just bought 49.9 percent of the German luxury sports car maker Porsche and will acquire all of the company by 2011, making Porsche its 10th brand.

The head of VW's supervisory board, Ferdinand Piech, has said he sees VW eventually owning 12 brands.

Commenting on the alliance with Suzuki however, the statement said "both companies will establish a cooperative relationship while respecting each other’s independence as a stand-alone entity."

"The companies plan a joint approach to the growing worldwide demand for more environmentally friendly vehicles," it added.

Date created : 2009-12-09

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