VW lines up Suzuki stake

Volkswagen is poised to take a 20 per cent stake in the Suzuki Motor Corporation in the next few days according to market reports.

Suzuki is an unassuming automotive giant, building 2.6 milion cars globally each year. However, it is the company’s expertise in small car design that is said to have attracted VW’s interest.

Suzuki also has a significant grip on the Indian market, selling various generations of its Swift and Alto small cars at different price points. It also has success with the Maruti brand in India and is the strongest player in Japan’s market for tiny K-car city vehicles.

However, Suzuki currently lacks an automotive partner. The company has long-standing ties with General Motors dating back to 1981, but GM sold 17 percent of its 20 percent stake in 2006 and the remaining 3 percent last November.

Merging the next-generation Swift and Polo could create a supermini family that would have both significant economies of scale and a global sales footprint.