Suzuki is looking to completely cut ties with Volkswagen.It appears that their two year partnership set to come and end, despite Volkswagen not willing to sell its shares.

Suzuki demand that Volkswagen shares are sold

Last Friday, it was announced that Suzuki has terminated the deal. As a result Suzuki also asked for Volkswagen to sell its shares which equate to 19.9% in the company. This time Suzuki do mean business as they are threatening Europe’s largest car manufacturer with legal action in form of courts and arbitration.

Volkswagen not backing down

Volkswagen is clearly not backing down, as mentioned earlier. A statement released by the company expressed their “disappointment” in Suzuki’s actions. It said “We are extremely disappointed that Suzuki has taken this step. There is no legal foundation whatsoever obliging us to surrender our shares. Volkswagen will continue to hold its stake.”

Accusations

The saga has been going on for two years, with many instances being considered quite “petty”. Volkswagen first referred to Suzuki as an associate rather than a partner, which offended the Japanese automotive firm.

Suzuki was then accused by Volkswagen of breaking their contractual agreement. They struck a deal with Fiat to supply diesel engines which Volkswagen opposed too. Suzuki were also said to have failed to give Volkswagen decent exposure into the Indian automotive market. Suzuki hasn’t been given access to Volkswagen’s new engine technology either, which was part of the partnership.

Independent firms once again

Suzuki Chairman Osamu Suzuki was adamant that the company are looking to take their own forward without Volkswagen.

“I am disappointed that we have to take this action but VW’s actions have left us no choice. They have continued to refuse our attempts on numerous occasions to resolve these issues through negotiation. I am more disappointed that having shaken the hand of Dr Winterkorn in agreeing to this partnership, he has not honoured his commitment to grant Suzuki access to what was originally agreed.In the absence of VW’s cooperation and given its failure to do what was agreed, there is no basis for the partnership to continue. We will now work to restore the relationship between Suzuki and VW to its original state as independent parties who do not restrict each other.”

Does Volkswagen now have no choice but to back down?