VW Explores Microcar Ties with Suzuki

Suzuki Alto Micro Car

Washington DC June 26, 2009; The AIADA newsletter reported that Volkswagen AG is exploring a potential cooperation deal with Japan's Suzuki Motor as a way to boost its expertise in the area of ultra small cars, a source familiar with the matter said today, confirming a report in manager magazine.

According to Automotive News, Ferdinand Piech, Volkswagen's powerful chairman, had signaled interest in Suzuki after praising it when asked at the Polo's media launch last month in Sardinia, which other brands could be added to the group's stable.

Suzuki is benefiting in Japan from the popularity of 660cc ultra small vehicles—a segment of bite-sized cars it dominates with Toyota's unit Daihatsu Motor Co. That helped Suzuki and Daihatsu overtake Nissan Motor Co. to become the second and third-ranked brands in Japan after Toyota in the past financial year.

The company also has a dominant patriarch similar to VW's Piech. Osamu Suzuki, the CEO who is in his late 70's, has held the post for the last 30 years and recently reclaimed the position of president, a post he had previously relinquished.

Suzuki is also enjoying success in emerging markets such as India, where its 54 percent unit Maruti Suzuki is the country's biggest carmaker thanks in part to its best-selling Alto—a tiny model built in India which shares a platform with Nissan's Pixo.