Threat Or Request : Suzuki Tells Volkswagen to Take Back Statements on Breached Contract or Else…

Hell hath no fury like a woman Suzuki scorned. On Thursday, the Japanese carmaker's CEO, Osamu Suzuki, sent a letter to his counterpart at VW demanding that the German group retracts its statement about Suzuki breaching their 2009 contract.

The spark that ignited this heated war of words between the two partners was Suzuki’s decision to choose Fiat as a supplier of diesel engines instead of VW. The German group said on September 11 that Suzuki had breached their contract with this decision, while Suzuki vehemently denies it violated the terms of their agreement.

A furious Osamu Suzuki said that he wanted to get rid of the VW “ball and chain”, demanding that VW returns its 19.9 stake in Suzuki, which will in turn hand over its 1.9% stake in VW.

Suzuki’s CEO claims that after VW’s diesel engines failed to meet the Japanese carmaker’s criteria, the German group was consulted about negotiating with Fiat thus its allegations of being unaware are false.

In addition, Suzuki also said that his company was denied access to much of VW’s technology despite promises to the contrary when the original deal was sealed.

Though the Germans don't want a divorce, the Japanese are ready to fight for it. We suspect the “War of the Roses” has just begun.

Story source: Automotive News [Sub.req.]

IAA 2011: Suzuki Reveals the New Swift Sport

Suzuki Swift Sport

A little over month ago, Suzuki released a single photo and gave us some basic information about its new Swift Sport. Now, the Japanese firm's sporty hatchback has made its world premiere at the Frankfurt Motor Show.

The Swift Sport looks like a normal Swift that’s been working out. Its front end sports a new grille and larger air intakes but it’s the rear end, with its diffuser and the two exhausts placed on either corner that really makes a difference.

Although it’s a completely new model, the new Swift Sport shares its M16A 1.6-liter naturally aspirated four-cylinder engine with its predecessor. However, in the new model maximum output has increased from 125 to 135 HP and torque from 148 to 160 Nm (109 to 118 lb-ft).

Despite the increased performance, average fuel consumption has dropped from 7.0 lt/100 km (33.1 mpg) to 6.4 lt/100 km (36.7 mpg) and CO2 emissions have been reduced by 11%, from 165 to 147 g/km.

Power is transmitted to the front wheels via a six-speed manual gearbox (the previous generation had a five-speed unit) designed exclusively for the Swift Sport with a triple-cone syncromesh in 1st and 2nd gears for easier shifting and a larger counterweight at the end of the shift lever that enables faster and smoother gear changes.

Of course, a Sport-badged model needs an appropriately tuned chassis in order to justify its name. So the new Swift Sport features a completely redesigned rear suspension with greater toe and camber rigidity and larger wheel bearings for better stability. Increased front and rear spring rates and added rebound springs at the front struts ensure better handling along with improved comfort.

The new Swift Sport will be manufactured, like all versions of the Swift, at Suzuki’s plant in Hungary and will be available in European markets from October.

Photo Gallery:

Suzuki wants to Dissolve Partnership with Volkswagen, but the Germans Say ‘Nein’

VW Suzuki

In a move more or less anticipated after the recent publication of Volkswagen's internal review that accuses Suzuki of breaking a contract agreement between the two companies by purchasing diesel engines from Fiat, the Japanese carmaker said it will abort its alliance with the German group. Suzuki's announcement comes almost two years after it forged a partnership with Volkswagen. The German had acquired a 19.9 per cent stake in Suzuki Motor Corp in December 2009 for 225 billion Yen (then, approx US$2.5 billion) while the Japanese automaker agreed to invest up to one half of the amount received from the German automaker into shares of Volkswagen.

The two automakers were supposed to work on a variety of projects including the development of hybrid models, electric cars and fuel cells, with Volkswagen also taking advantage of Suzuki's leading position in the Indian market. However, none of this ever happened with the two sides barely even talking to each other, according to recent comments from the Japanese firm's chairman, Osamu Suzuki.

Suzuki says it never received the access it wanted to VW's technology.

However, as with many real-life divorces, Suzuki's intent to break up with Volkswagen may not go as smoothly as it wants.

While the Japanese carmaker issued a press release stating that it would like to dissolve the partnership by buying the Suzuki shares held by VW and sell back the VW holdings it has, the Germans do not appear to be willing to make such a move.

"We have no plans to sell our stake in Suzuki," Volkswagen spokesman Michael Brendel told AP/Yahoo Finance. "We are keen on continuing the cooperation," he added.

Scroll down to read the official press statement from Suzuki.

[Suzuki Press Release]

Suzuki made a Timely Disclosure regarding the Partnership with Volkswagen AG

Suzuki hereby announces that its board of directors has officially determined today dissolution of the comprehensive partnership and the cross-shareholding relationship with Volkswagen AG. On 9th December, 2009, Suzuki concluded the Framework Agreement with Volkswagen AG and both companies have made various discussions for about two years; however, Suzuki has come to the above determination for the following reasons.

1.Reasons for Dissolution of the Comprehensive Partnership and the Cross-shareholding Relationship

Based on a proposal from Volkswagen AG, Suzuki concluded the Framework Agreement with Volkswagen AG to proceed with partnership as “independent entities and equal partners.” Suzuki’s primary aim for the partnership was to receive technology transfer (including receiving technical information, etc.) from Volkswagen AG so that Suzuki could accelerate its development of environmental technology and other engineering areas to cope with intensifying competition of technology development in the worldwide automotive industry. In order to ensure such cooperative relationship, both companies agreed to have the cross-shareholding relationship.

However, Suzuki had to realize that with Volkswagen AG’s minor equity participation of 19.89% in Suzuki, it is difficult to receive technology transfer at the same or higher level as Volkswagen Group companies where Volkswagen AG has nearly 100% of voting rights. From the beginning of this year, Suzuki has been accelerating its development of own environmental technology and other engineering areas.

Suzuki thinks that it is crucial to secure “independence” in its operating policy decision for maintaining its competitiveness in the domestic Kei-car market and Asian markets including India. However, Volkswagen AG publicly reported that Suzuki was a “company over which Volkswagen AG has significant influence on financial and operating policy decisions”.

Taking account of these facts, Suzuki has concluded that it is difficult to attain its primary aim for the partnership and also there is concern that the partnership would cause negative impact on Suzuki’s autonomous decision-making in its operating policy. Therefore, Suzuki’s board of directors has officially determined dissolution of the comprehensive partnership and the cross-shareholding relationship with Volkswagen AG.

2.Dissolution of the Cross-shareholding Relationship

As Volkswagen AG requested equity participation, Suzuki accepted the proposal in order to realize the Suzuki’s above primary aim and transferred its shares to Volkswagen AG through the scheme of “third-party allocation of shares.” Since the purpose based on which Suzuki transferred its shares to Volkswagen AG will be lost upon dissolution of the partnership, Suzuki is going to request Volkswagen AG to dispose of Suzuki shares held by Volkswagen AG according to Suzuki’s intention.

Regarding the shares of Volkswagen AG that Suzuki currently owns, if Volkswagen AG disposes of its Suzuki shares in line with Suzuki’s intention, Suzuki also will dispose of its Volkswagen shares in line with Volkswagen AG’s intention.

Suzuki has been proceeding with successful business cooperation with domestic and foreign automotive companies without equity relationship. Suzuki believes that if relationship with Volkswagen AG becomes that of “true business partnership” after dissolution of the cross-shareholding relationship, both companies would have good environment where successful cooperation can be built up in fields that both companies gain benefit from.

3.Future Prospects

Discussions between both companies are expected to be organized as to dissolution of the comprehensive partnership and the cross-shareholding relationship. Suzuki will make announcement as soon as both companies reach final conclusion including timing of dissolution, etc.

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.

Motorcycle Wheelie Goes Terribly Wrong – or Why You Should Always Keep a Distance from Amateur Stunts…

Suzuki MCT

Random stunt displays may capture people's interest but there is a very good reason why organizers at professional events keep the crowd back at a safe distance from the performer(s).

The video you're about to watch shows a motorcyclists attempting a wheelie in what is said to be a Suzuki GSX-R when he suddenly loses control and ends up smashing the bike in the face of two by standers…

*Update: The user has disabled embedding but you can watch the video on Youtube by clicking this link