VW buy a share of Suzuki
Added on Wednesday, December 9th, 2009 by Carole Nash Editor | No Comments
VW buy a share of Suzuki
Suzuki have announced a strategic alliance with the VW-Audi-Porsche car giant, according to international business newswires, reports Alastair Walker.
The deal sees VW take a 20% slice of Suzuki’s shares for 2.5 billion US dollars, although Suzuki are obliged to spend half the money immediately, purchasing VW stock. Not a bad deal for VW then; 20% of the Japanese car, truck and motorcycle maker for 1.25 billion dollars. The light truck market in Asia, where Suzuki are one of the main players, is of particular interest to VW and is set to offer a large amount of profit as India, China, Taiwan and Thailand continue to grow.
Suzuki have a long history of car manufacturing, having launched their first four-wheeler as far back as 1937. General Motors formerly owned a slice of Suzuki, but following the GM collapse last year, the Japanese auto group have been looking for a bigger partner to help them survive in the long run.
In terms of Suzuki motorcycles, the deal isn’t likely to have a great impact in the short term. VW don’t make motorbikes but with a 40-50% rise in motorcycle sales across India in 2009, there is a golden opportunity for VW-Audi to learn about high volume, low cost motorcycle production in developing economies.
There are also savings in procurement which Suzuki will be able to make with VW group behind them, although it’s not likely to make much difference when sourcing relatively small numbers of parts to make over-200cc sized bikes. The short answer to your question, `will this mean cheaper Hayabusas?’ is `No.’
Will the deal put VW-Audi group out of the running in the rumoured buy-out of Harley-Davidson, or the long shot bet of acquiring its MV Agusta brand, which is currently being sold by Harley?
Well, Ferdinand Piech, the Volkswagen group chairman is said to be keen on adding H-D to the 12-brand strong `family’ of Volkswagen in the future. The sums involved in buying Harley or MV would be fairly small, given the US bike makers’ existing debt. Porsche know Harley inside out, having assisted in the development of the V-Rod engine a decade ago. Porsche is 49% owned by Volkswagen.
The development of a totally new Harley-Davidson engine/chassis for the future, or even an MV Agusta superbike range for 2012 and beyond would be easier with VW-Suzuki’s technical help and component parts buying power. There’s no doubt that further consolidation in the motorcycle sector is inevitable, given a shrinking leisure market in the US and Europe, but rapid expansion of commuter machine sales in South America and Asia.
Those who hold the strongest range of brand names, built at the cheapest labour rates, are likely to make the biggest profits over the next decade.
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