Optimism is a rare commodity in the auto industry these days, and nearly all of it comes from the so-called BRIC nations of Brazil, India, China and (to a lesser extent) Russia. India in particular is being targeted as one of the few growth opportunities for the industry’s global players. Nissan/Renault, Volkswagen, Honda, Ford and GM have all recently announced major initiatives to target growth in India’s entry-level market, and GM even gave up control of its Chinese operations in order to beef up its Indian presence. But, as the Hindu Business Line reports, India could be staring down the kind of overcapacity that is causing so many headaches for automakers in mature markets.

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Osamu Suzuki said today he would probably refuse advances by Volkswagen if they would want to get deeper in bed with their new Japanese bride.

“When Suzuki becomes a bigger and more successful company, Volkswagen will probably want to buy more of our shares,” Suzuki said. “If that happens, Suzuki will probably respond by saying, ‘Let’s continue as we are.'”

We’ll see.

The dominant Japanese car companies remain uncomfortable with their nationality, doing their best to seem somehow American lest they provoke a political backlash. Even as unabashedly Japanese products have become prevalent in the intertwined worlds of TV, gaming, and toys, I cannot recall a car with so much as a Japanese name prior to Suzuki’s new Kizashi. Why Suzuki? Well, they’re too small in the U.S. to fear a backlash. And tagging a motorcycle Hayabusa didn’t exactly harm its popularity. Why “Kizashi?” The name means “something great is coming.” Well, is it?

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Yesterday, Volkswagen became the Suzuki’s top shareholder. VW transferred $2.4b in return for a 19.9 percent stake in Suzuki. Suzuki turned around immediately and used $1b of the money received to buy stock in Volkswagen. Consider the couple as intertwined.

With the marriage sealed, both companies went right to work. (Read More…)

Volkswagen and Suzuki aren’t wasting any time in consummating their marriage. VW is thinking of providing its hybrid technology to Suzuki. This is what Ulrich Hackenberg, head of VW’s Forschung und Entwicklung (R&D) told The Nikkei [sub] on the sidelines of the NAIAS in Detroit. As usual for a tight-lipped R&D guy, Hackenberg did not volunteer any details, timing or models.

Unusual for a usually tight-lipped R&D guy, Hackenberg said Suzuki has excellent technologies, including low-cost production know-how, and that the two firms have a lot to learn from each other. He also said VW will support its Japanese partner in China, where Volkswagen has a commanding market share, and where Suzuki needs help.

“What Volkswagen hybrid technology?” you will surely ask. (Read More…)

Freshly wedded Suzuki and Volkswagen are not losing any time in consummating the marriage. Joint work will start immediately, or rather on January 10, 2010 said Suzuki Chief Executive Osamu Suzuki to Reuters. With that date, Suzuki-San is already bowing to Wolfsburg’s ingrained culture. As of this coming Friday evening, everybody who is somebody at VW will be off skiing in Zermatt or soaking in the surf of the Maledives, not to return before January 10^th. No linkup with Suzuki will change that.
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First Renault and Nissan. Then VW buys a stake in Suzuki. Now Mitsubishi Motors  is in talks with PSA Peugeot-Citroen about a capital tie-up.

You’ve seen nothing yet, thinks Japan’s Nikkei. “The latest round of partnerships is widely seen as just the beginning of a major shakeup of the automaking industry,” says the paper that is usually well informed about these matters.

“Both Mitsubishi and Suzuki should take cues from Nissan Motor Co, which was rescued from the brink of bankruptcy in 1999 by French firm Renault SA.” says the Nikkei: Translation: Don’t just have small minority share and swap deals. Sell majority control to partners with deep pockets. And get ready for a serious battle for world market domination.
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Das Autohaus [sub] has it from India’s Economic Times that VW and Suzuki are planning a low-priced mini-car which could give Tata’s Nano some problems.
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Who would have thought that they are moving that fast: VW will buy a 20 percent stake in Japan’s Suzuki for $2.5 billion. It’s announced and it is official, including a photo-op with a beaming Winterkorn next to a grinning Osamu Suzuki. Rumors of that, well, tie-up had been around for a while and had recently intensified, but the speed is nonetheless surprising. Except for those who know Piech. At the September IAA auto show, Piech had said that 12 brands are better than 10. Everybody who knew Piech knew that he was referring to MAN/Scania trucks on one end of the spectrum, and Suzuki small cars and even motor bikes at the other.
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Rumors of a VW-Suzuki tie-up were first floated on these pages by Bertel Schmitt, who reported that VW might be after a ten percent stake in the Japanese firm last summer. And with news last week that GM was buying out Suzuki’s stake in CAMI, the momentum seemed to be building. Well, Reuters reports that Volkswagen could announce that it’s taking a 20 percent stake in Suzuki, a deal valued at $2.8b, as soon as this week. Another source tells Reuters that the VW stake could become a 33 percent plus controlling interest in the future.
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In my editorial on GM’s plant to take on the Indian market in partnership with SAIC, I wrote that Maruti Suzuki’s monstrous market share indicated the possibilities for GM. Well, the Indian market leader isn’t going to just sit on that lead. In 2007, Osamu Suzuki said that his firm’s Indian passenger car market share would never drop below 50 percent, an assertion that took two years to prove untrue. The WSJ reports that although the overall Indian market will probably grow 16 percent this year, Maruti’s share of that market has fallen over the last year from 45 percent to about 40 percent (with passenger car share down from 55 percent to 48 percent).

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News that GM is selling a control-shifting single share in GM Shanghai to its Chinese partner SAIC was the toads-from-heaven flourish at the end of an epic week for the RenCen. The day after the last of GM’s lifer CEOs left the building, Opel’s CFO followed suit. One management re-organization and a rough LA Auto Show later, came this symbolic surrender of GM’s largest market for a measly $85m. Accompanied by news that The General would buy out Suzuki’s stake in CAMI for an estimated $46.5m, no less. Oh yeah, and something about India. Freshly-minted CEO and notorious rattlesnake killer Ed Whitacre isn’t about be accused of not trying to shake things up. The only question is where will everything land?

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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.
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What, GM actually has the money to BUY companies? Suzuki says they want sell the whole shebang in their 50:50 joint venture in Canada to their JV partner, General Motors, says the Nikkei [sub]. That would be the end of a more than 20-year marriage.
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An overview of what happened in other parts of the world while you were in bed. TTAC provides round-the-clock coverage of everything that has wheels. Or has its wheels coming off. WAS is being filed from Tokyo this week.

GM flirting with FAW: GM is holding discussions with major Chinese automaker FAW Group to form a partnership for light commercial vehicles, Reuters reports. The two parties have already registered a name with the State Administration for Industry and Commerce, which is the first step of Chinese joint venture courtship. GM already makes light commercial vehicles in China in a three-way tie-up with SAIC and Liuzhou Wuling. GM manufactures Buicks in Shanghai with SAIC, China’s largest auto maker. FAW, one China’s three biggest automakers, operates car manufacturing ventures with Volkswagen and Toyota. SAIC is also in a joint venture with VW. SAIC and FAW have been considered bitter rivals, although there are reports of a thawing. GM said its commercial vehicle venture in China sold 19.7 percent more vehicles in January than a year earlier, helped largely by sales of the Wuling Sunshine minivans.
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