After the Breakup: The Troubled Alliance between Volkswagen and Suzuki
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Case Code: BSTR412 Case Length: 16 Pages Period: 2008-2012 Pub Date: 2012 Teaching Note: Not Available |
Price: Rs.500 Organization: Volkswagen AG, Suzuki Motor Corporation Industry: Automotive Countries: Global; Europe; Asia Themes: Growth Strategy, Strategic Alliance, Implementation |
Abstract Case Intro 1 Case Intro 2 Excerpts
On November 18, 2011, the relationship between Suzuki Motor Corporation (Suzuki) and Volkswagen AG (VW) came to an end, with Suzuki terminating the framework agreement between them. Suzuki also demanded that VW return its 19.9% shareholding in the company. In December 2009, VW and Suzuki made headlines when the German company purchased a 19.9% stake in the Japanese manufacturer. Both agreed to share their technologies and cooperate with each other. VW agreed to provide its larger-vehicle technologies to Suzuki; Suzuki, in turn, agreed to provide VW access to its small-displacement motors and Indian presence.
While the proposed partnership goals spurred interest among industry observers, both the auto manufacturers failed to arrive at an agreement on any of their proposed goals. Since the second quarter of 2011, there were indications in the media that the partnership was failing. Suzuki claimed that VW did not give it access to the hybrid technology which it had promised to share when forming the alliance. Similarly, VW accused Suzuki of violating the agreement by procuring diesel engines from Fiat S.p.A3 (Fiat). The partnership further soured because of their cultural differences and failed joint business proposals. Apprehensive that the issue might adversely affect their cooperation with other companies, the two parties finally terminated their partnership in November 2011....
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