The TVS-Suzuki Break-Up

Reportedly, Suzuki not only refused to provide funds and technology for the new models, but also created road blocks to the management instead of helping them. A company watcher said, "Everything without exception had to be approved by Suzuki." TVS Suzuki was thus left with no option but to use its internal accruals for putting in place the turnaround strategy. Instead of getting new technology from Suzuki, TVS Suzuki had to re-engineer the basic Suzuki models, which led to the launch of the Samurai and the Shogun. The next major dispute between the two parties arose in the mid 1990s, when Suzuki, which had around 26% stake in the company's equity holding, expressed its desire to increase the equity holding...

Analysts also opined that other than the Fiero, Max 100 and the Samurai, there was no technological collaboration from Suzuki and the transition period of 30 months was long enough for TVS to become technologically self-reliant. Meanwhile, the company's name was changed to TVS Motor Company Limited in November 2001. In December 2001, TVS Motor Company opted for an early end to the licensing agreement with Suzuki and asked for expiry of the agreement by the end of April 2002. According to reports, the early end of the agreement would result in substantial savings for the company in the form of royalty which it would have had to pay Suzuki. In early 2002, with the company having secured around 33,000 bookings for the Victor, analysts claimed that it was just a matter of time before TVS was accepted to have mastered the four-stroke technology...