Today’s Nikkei [sub] agrees with the TTAC commentariat that Suzuki is overripe for a takeover. “Now that Suzuki has dissolved its joint venture assembly plant with General Motors Co. in Canada, the Japanese automaker, with its long presence in emerging markets and strength in subcompacts, appears an attractive partner for an alliance.”
No kidding. As it has been pointed out by TTAC’s Best & Brightest, Suzuki has what other makers need, and Suzuki needs what other makers have.
Suzuki has India, for starters.
Says the Nikkei: “Suzuki had raced ahead of rivals to kick off local production in such developing countries as India, China and Pakistan. This has driven earnings at the automaker, which today still dominates the Indian market with a 50 percent share. By expanding business in India, the firm’s operating profit in the Asian region overtook its Japanese tally for the first time last fiscal year. “
What does Suzuki need? “The firm faces a growing need to find a partner because of its late start in hybrids, electric vehicles and other environmentally friendly offerings,” says the Nikkei. Greenwashing aside, what Suzuki really needs is size.
With an output of 2.36 million units a year, Suzuki is a tad too small to tough it out with the big boys. Yet, those 2.36 million are more than big enough to make someone like Volkswagen the world’s #1 in an instant. VWs Piech has been long been rumored to be lusting for the attractive Japanese bride.
The Financial Times also weighs in on the matter: “Far more interesting are the advanced negotiations apparently under way between Volkswagen and Suzuki. VW is already Europe’s biggest and is challenging Toyota for the top slot in the world car league. Ferdinand Piëch, VW’s veteran chairman and consummate empire builder, has always said he would like to see the German group controlling 12 brands.”
Muses the FT:
“The deal with the Japanese company would help resolve VW’s Achilles heel. Despite its successes, VW has in recent years struggled to manufacture profitably low-cost small vehicles. Suzuki, by contrast, has long had an impressive record of making small cars profitably and an enviable emerging markets exposure in countries such as India or Indonesia that can only make a partnership even more attractive for VW.”
“In return, the Germans would offer larger car, diesel and electronics expertise and better access to European and US markets to Suzuki. For the Japanese company has struggled to build a strong position in Europe and has had trouble hanging on in the North American market.”
“Mr Piëch would presumably also enjoy undermining some of his biggest rivals by striking a deal with Suzuki. Renault-Nissan, too, is believed to have considered investing in Suzuki and bringing it into its international alliance. “
With whom will the Nipponese beauty walk down the aisle? With the Austro-Teutonic leader of industry with floppy ears and a well-documented appetite for companies and women? Or with the suave French charmer who offers a menage a trois with Renault and Nissan? Stay tuned for the next episode of Nippon Nampa …
Note that any gratuitous (or paid) references to “tie-ups” have been omitted, to facilitate a no strings attached choice of imagery. Extra credit: Who’s the depicted bride?
Well, if we are talking about the optical depiction, below the headline, I’d say it is the 2nd to the last of “Charlie’s Angels”.
On the other hand, if we are talking about the Austro-Teutonic bride(groom), no doubt it is that purveyor of Erb(Streu)gut, Mr. ” ‘The Funky Quattro’ is just another position in my personal kamasutra”, himself
( http://p3.focus.de/img/gen/k/j/HBkjvXxt_Pxgen_r_380xA.jpg ).
btw, Floppy ears?
btw, Floppy ears?
You better believe it.
Yes, I suppose so, if I imagine them subjected to a rapid series of emphatic reverse rotations of the head accompanied by a sound track of “Nicht in Ordnung!” As for the static depiction, they just look like a pair of jug handles to me.
Perhaps this is what all those paramoronic chicks found so irresistable?
Herr Walter, I see you know Herr Spaltmass quite well …
The bride is someone, I think, Bertel knows very well.
Back to topic, I hope VW don’t go for Suzuki. I like them as an independent makers.
Bertel, floppy ears aside, and viewing the match-up thru the lens of culture (and despite the good germano-japanese relations you enjoy) what is your take on the likelihood of harmony in a VW-Suzuki tie-up? I’ve professionally been witness to the oil and water nature of trying to meld these two cultures into a durable organization and wonder if Suzuki wouldn’t become less after a VW tie-up.
Oh, and btw, doesn’t Toyota now hold the equity in Suzuki, ca. 12% IIRC, that GM abandoned in its attempt to delay its slide into insolvency? How does this figure? Wouldn’t ToMoCo have likely, quietly, purchased an option to buy control in Suzuki as insurance against floppy-eared conglomerators?
Toyota does not own any (significant) part of Suzuki; at least they don’t make it into top five shareholders, and the fifth is at 3.45%.
Incidentally, Piech has said in the past that he also wants to be in the motorcycle business. The speculation has been that KTM would be an appropriate acquisition, but Suzuki would also give VW the motorcycles …
I stand corrected. I just looked at Suzuki.co.jp/IR page and it is true, ToMoCo is not to be found there. I did a quick Google of Toyota Suzuki and found an undated AutoNews.com page showing GM’s (long gone) 3% equity in Suzuki as well as Fuji Heavy’s (Subaru’s parent) 1% (of which at the time GM also held a share – perhaps the 12% that is in my memory? And perhaps the 12% is the GM shares which were sold to ToMoCo as GM melted down … I’ve not the time, so I’ll make the unverified comments here and leave the research to others.)
Robert, I suspect you may have confused the Subaru-GM-Toyota chair game with Suzuki. So much fur has been flying that it gets hard to keep up. Hmmm, floppy ears, voracious appetite … do you suppose Piech is a furry?
All I know about Suzuki is the Geo Metro and Tracker my sibs owned and liked. And my 8hrs rental of a new Suzuki AWD wagon thingy I rented to fetch parts when my sons car spit out the crank pulley in Albany on the way to Toronto. In rain and fog , we crossed the Berkshires twice, putting 250 miles on the car. It was fun to drive once it dawned on me it was AWD and could stand a little hoonage. Suzuki make a good little car . That oughta be worth something in these times.
Ajax editor is AWOL again (this time on IE8).
Just didn’t believe I could have been so far off with the equity participation story on Suzuki, so I snooped Google news for a few:
– 1981-1998, GM holds a 3-5% stake in Suzuki;
– 1998, GM increases stake from 3.3 to 10% for 346M USD;
– 10/2005, GM sells its 20% stake in Fuji Heavy (8.7% stake going to Toyota);
– 03/2006, GM sells 17.4% stake (original was 21%) in Suzuki for 2G USD (but no mention of Toyota.)
If anyone finds evidence of a Toyota-Suzuki relationship (JV, or equity participation, I’d be interested to hear of it … in the meantime, I’m going to eat whatever it is that helps to improve memory … now if I could just remember what that food is…)
Tomoko Okuda, nee Kawase.
When reading Motor Trend last night, they wrote it up like it’s a done deal. So I quietly put down the magazine in the nearest trash can.
Is there any type of graph, table or chart that shows what companies currently hold stakes in which companies and how many %? It would make speculating much easier if we saw at once how much GM owns all over the World, Toyota, Mazda, Honda. etc. would also be good to see how exactly they share cars and platforms.
I always thought Suzuki (and Subaru) belonged to GM majorly and the quality showed. Not sure if that has changed much. Suzuki is regarded below Kia in Europe. Or it was Kia and Deawoo-like before Kia actually got to Europe. I know, all of them (except Daewoo0/Chevrolet) improved over time. but are they VW material like Skoda ?
And from what I saw the Geo Metro is nothing diffeent than the Suzuki Swift / Subaru Justy sold in europe (with very questionable reputation here and there) . So I’m not sure how VW would benefit from suzukki in regards to NA and europe. Possibly developping countries as china India etc. would be a good fit.
Ok, waking up late in the Mountain West USA (New Mexico to be exact), let me throw in my two cents.
Bertel, this is a picture of your famous wife, finally! I was going to make a crack about Japanese bride get ups but then I realized it’s no more crazy than what we put our brides in, in the USA and Europe.
Back to the subject at hand. A Japanese/German wedding? Bertel, would you like to walk the bride down the aisle? But yes I can see how several suitors would be attracted to someone with dealerships in areas where they have almost no presence.
@ Rod Panhard:
Motor Trend only comes out once a month, hence they are constantly “close, but no cigar” especially when it comes to news in this extremely fast-paced automotive “we bought them, oh wait, no we didn’t, but they might” world. Check motortrend.com for more up-to-date news, and fish the mag out of the trash and enjoy it for what it does best: Testing the latest iron.
Don’t kill the messenger…
The SX-4 is one of the few cars I actually like and want to buy. What’s holding me back is the fear Suzuki might abandon the car market here, orphaning the cars.
I wish they would change the final gearing on the SX-4 so the engine turns fewer RPMs on the highway, netting a quieter ride and better gas mileage. The SX-4 should get better mileage, like 32 or 34, not upper 20’s
I’m with you on the SX4 hatch. I test drove a 2009 AWD hatch base manual and it was only missing cruise control, a stereo AUX input, and a 6th gear.
I’ve read that for 2010 they’ve added the 6th gear, but not sure if it improved final drive or just added a cog inbetween. Plus you can now get the hatch without AWD so it is supposed to get better mileage (EPA rated 22/30 for 6spd 2010 vs. 21/28 for 5spd 2009).
I think you’re rightly afraid of their market exposure as am I. I tried to check and see if there are any Kizashis locally yet and it appears the local dealer (7 mi away) abandoned Suzuki. It was merely tacked onto the offsite used car store for the local Toyota franchise, and didn’t have a Suzuki showroom anyway. The day I tested the SX4 back in August there were 11 Zuks on the lot and 5 were XL7s. The next closest Suzuki store is just over an hour away (ironically, it’s also a VW store) and the next yet is about 2 hours away. And I’m in Richmond, VA so it’s not as if it’s a rural BFE town in flyover country.
If it happens, I hope they don’t stop making motorcycles.
I have an ’85 GSX-R (they were available in Canada and Europe in 85, not in the US until 86). Incredible bike.
@Robert,Walter: Bertel, floppy ears aside, and viewing the match-up thru the lens of culture (and despite the good germano-japanese relations you enjoy) what is your take on the likelihood of harmony in a VW-Suzuki tie-up?
Don’t think there will be anything harmonious. The VW style of a merger was always to invade, garrison, and subjugate. If they can’t merge with their own family business (Porsche) without all-out war, does anybody think that they will harmoniously merge with a culture that emphasizes group think, polite understatement, and no boisterous public utterances?
Now, Piech was always fascinated with all things Japanese. When he was young, he wanted to be a Honda engineer when he would grow up. When he took over as CEO at a VW that battled with horrendous quality problems, he tried to convert VW to a Japanese corporate philosophy called “kaizen.” Of course, the natives immediately went restless and refused to pray to alien gods. So kaizen was replaced by “KVP” or “kontinuierlicher Verbesserungsprozess” and because that wasn’t catchy enough, it was then renamed to “KVP hoch zehn” (continous improvement process to the 10th dimension.) Sounded Teutonic enough and had the requisite hubris. I’ll leave it to the B&B to opine whether that process ever worked.
Piech is a binary man. Either yes or no. No grey area. Japanese style is just the opposite, intentionally ambiguous, rarely a yes and most certainly never an outright no. Can’t envision a bigger culture clash. And just because of that, it might work.
BS: Would you please comment on the relationship and difference of cultures between Renault and Nissan?
Thanks!
The Suzuki SX4 and Grand Vitara are both awesome vehicles. The SX4 lacks nothing, in my opinion. Gorgeous, fuel-efficient and possessing AWD capability.
The Suzuki Grand Vitara is also awesome but I’m disappointed in the difficulty in finding one with the four-speed transfer case. I remember last year the local Suzuki lot had a base XSport with four-cylinder engine, four-speed transfer case, and auto. That was awesome. (Then the dealership tried to steer me towards an SX4, since I’m a college student and he apparently figured that I could afford to buy one now. And the Grand Vitara carried a $500 dealer markup because “Suzuki is the fastest-growing carmaker in America” and the dealer wasn’t going to back down. No chance I’m going back there.)
Anyway, the GV this year is available with fewer choices, and you can only get the four-speed case with V6 and a premium package with sunroof and a bunch of other crap I wouldn’t want.
Long story short… hmm… I saw some of their cars and thought they were OK? Yeah, I guess that’s my point.
Not having been close to Renault or Nissan, I cannot make an educatewd contribution.