Volkswagen acquires a 19.9% stake in Suzuki

Under the agreement, Volkswagen will have a 19.9% stake in Suzuki, while the Japanese carmaker in return will purchase shares in Volkswagen, using the proceeds from the acquisition, which is said to be approximately US$ 2.5 billion.

The news comes shortly after Volkswagen announced that it has completed its purchase of a 49.9% stake in Porsche’s car operations for €3.9 billion. The move to collaborate with Suzuki is said to be part of a strategic plan to take advantage of Suzuki’s expertise in small, fuel-efficient cars as well the Japanese firm's presence in India where, under its Maruti arm, sells almost half of all cars in India.

Suzuki could also benefit from Volkswagen’s expertise in diesel technology and hybrid systems to help further its presence in Europe. Once the transaction is approved, the new collaboration will result in the world’s largest manufacturing alliance, surpassing even Toyota.

At a joint press conference in Tokyo, Suzuki Chief Executive Officer Osamu Suzuki said that the two companies also plan to develop hybrid and electric vehicles under both brands. "As demand continues to rise for smaller cars and for powertrains with higher fuel efficiency and lower CO2 output, Volkswagen and Suzuki will offer a compelling solution for customers in emerging markets buying a car for the first time and also for customers in advanced economies seeking to lower their CO2 footprint while still enjoying the freedom of transport offered by an exciting range of cars," VW said in a prepared statement to the press.