Toyota ends VW partnership in Japan

By Mark Kleis - Posted December 23rd 2009

In an otherwise quiet week in the auto world, a few automakers have decided the holiday season was the best time to end their ties with previously important partners. Yesterday afternoon Leftlane reported on the potential end of the long-standing Isuzu and GM partnership, and now Toyota has announced that its ties with VW in Japan will come to an end in 2010.

A brief report coming from the Nikkei Weekly newspaper in Japan says that the 17-year relationship between Toyota and VW will soon be coming to a close.

Japan is a notoriously loyal market when it comes to buying just about anything – especially cars. Imported brands account for only a small fraction of total sales, so VW’s choice of partnering with Toyota to sell its vehicles at Toyota dealerships gave VW a crucial stepping stone into a difficult market. Over time, this partnership played a key role in helping VW to grow to become the number one importer into the Japanese market over the last nine years – selling 45,522 vehicles last year alone.

Now with VW making it very clear that they intend to become the world’s top automaker by the middle of next decade, Toyota has decided that it is time to cut ties with VW and stop helping them by distributing half of its annual sales in Japan. Although it is unlikely that losing a potential few to several thousand annual sales will play a major role in stopping VW from eventually unseating Toyota as the world’s top automaker, it is a step in the right direction if Toyota believes it can protect its crown.

Leftlane also reported that VW recently purchased a 19.9 percent stake in Suzuki, but a Toyota spokesperson announced that the termination of the Toyota-VW contract was not a result of the new partnership involving Suzuki.