German carmaker Volkswagen has agreed to take a 19.9 percent share – worth about $2.5 billion – in Japan’s Suzuki . Both automakers think the deal will help position them better in developing countries and in the production of more efficient cars.
“As demand continues to rise for smaller cars and for power trains 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 statement released to the media.
The deal is still subject to regulatory approval, which VW expects to pass in January. Suzuki says it will invest half of the $2.5 billion into VW shares.
What the tie-up means for the North American market is still unclear. Suzuki, which has worked with Fiat in the past on small car projects, has never gained much traction in North America, although it is currently in the process of launching a new rather VW-inspired small sedan, the Kizashi, and rumors abound that the compact Swift is set for the United States and Canada. VW says it plans to bring its small Polo hatchback to the United States and Canada.
