Official: VW Says Suzuki Violated Agreement by Purchasing Diesel Engines from Fiat

It's no secret that Volkswagen's business relationship with Suzuki after the Germans acquired a 19.9 percent of the Japanese manufacture's shares in December 2009 under a strategic cooperation has been a deeply troubled one. However, up until now, the two sides tried to keep the problems "in house".

But today, following recent comments from the Japanese firm's chairman Osamu Suzuki that the two companies "aren't even talking", the Volkswagen Group decided to make these problems public with an official announcement.

Europe's largest automotive group said that after reviewing their partnership, it found that Suzuki broke the contract agreement by purchasing diesel engines from another manufacturer. Although VW doesn’t name the "other manufacturer", Suzuki recently made a deal with the Fiat Group to buy its diesel engines.

"Volkswagen takes the view that this contradicts the terms of the cooperation agreement. Suzuki has now been given a period of several weeks to remedy the infringement," the German company said in a statement today.

"Volkswagen considers this step regrettable, but necessary, and has offered to discuss the matter with Suzuki. At the same time, the company stresses it still regards Suzuki as an attractive investment," VW added.

The German company also said that even though the cooperation is moving slower than expected, it has not yet reached a final decision.

"In its half-yearly financial report published in July 2011, Volkswagen noted that the partnership is developing more slowly than expected and announced a review. This review has not yet been finalized," VW stated.

Suzuki has not yet released a statement on the matter.