Back in 2009 Suzuki and Volkswagen announced a joint alliance, a commercial tie-in that would open up Suzuki’s market share in the far East to Volkswagen and as it turned out nothing for Suzuki.
The Japanese car maker hoped the co-operation would give Suzuki access to VW’s fuel-efficient technology and engineering insight’s. The deal gave VW 19.9 percent of Suzuki’s share capital.
The co-operation didn’t happen, senior Suzuki executives became irritated with VW’s lack of co-operation and openly referred to the alliance as a “ball and chain”.
In 2011 Suzuki’s senior management met with VW in a tense standoff to demand that VW sell off its its share holding in order to dissolve the alliance.
VW never even flinched and despite legal arbitration found in Suzuki’s favor in the end the Japanese company bought back the 19.9 percent stake held by VW.
News of the $3.9 billion dollar buy-back was at least positive as Suzuki’s shares jumped by 5 percent.
Suzuki had hoped to develop a VW derived hybrid-powertrain for the Swift, but VW recently claimed it doesn’t even disclose such technical information with its Audi subsidiary.
After all the time and money Suzuki has spent it could have developed next generation technology on its own for less than the cost of the ill fated alliance with Volkswagen.