Tag Archive | "Suzuki Motor Corp."

Suzuki Chairman Says Unclear When Court May Rule on Row with Volkswagen

Suzuki Motor Corp Chairman Osamu Suzuki said it was unclear when an international arbitration court will rule on its 2-1/2 year dispute with Volkswagen AG over their failed partnership, reported Reuters.

Japan’s No.4 automaker by global sales volume filed for international arbitration in November 2011, after Volkswagen refused to sell back a 19.9 percent stake in Suzuki it acquired in January 2010 for 1.7 billion euros ($2.3 billion).

Earlier this month, sources familiar with the matter told Reuters that a London-based arbitration court had wrapped up witness hearings and was expected to issue a ruling before the end of the year.

“It’s unclear,” the 84-year-old chief executive told reporters in Tokyo when asked about the likely timing of a ruling. Pressed on whether the two companies could reach a settlement, he said repeatedly: “We are the ones that took this to court.”

The two automakers agreed on a tie-up in December 2009, vowing to work together on technologies in areas such as hybrid and electric vehicles, and on expanding in emerging economies.

Suzuki later accused its German partner of withholding hybrid technology it had promised to share and demanded the return of the 19.9 percent stake. Volkswagen for its part complained about Suzuki’s purchase of diesel engines from Fiat SpA.

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Suzuki to Discontinue Auto Sales in Canada After 2014

Richmond Hill, Ont. — After American Suzuki filed Chapter 11 bankruptcy last November, Suzuki Canada Inc. (SCI) announced it will also discontinue its auto sales. Officials said the company will realign its business operations to focus on the long-term growth of its Motorcycle, ATV and Marine Division in Canada and transition out of the automobile business.

Earlier this year, Suzuki Motor Corp. of Japan confirmed the production and supply of 2014 model-year automobiles to SCI, and this decision will remain in effect. After the release of its 2014 lineup, it will discontinue production of new automobiles for Canada.

On Nov. 5, 2012, American Suzuki Motor Corp. announced its decision to focus its operations on the long-term growth of its Motorcycle, ATV and Marine Divisions, and to discontinue new automobile sales in the continental U.S. Since then, SMC and SCI officials said they have been monitoring market conditions carefully. After reviewing the long-term viability of automotive production for Canada, SMC concluded that it was no longer feasible for it to produce automobiles for distribution and sale in the Canadian market.

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Suzuki Issues Forenza and Reno Model Recalls

First reported in the New York Times, Suzuki is recalling almost 102,000 of its 2004-6 Forenza and 2005-6 Reno models because the headlights might fail. It is the second recall of those vehicles in the last five years for headlight problems.

In a document posted to the Web site of the National Highway Traffic Safety Administration, Suzuki said a wiring problem could cause the sudden loss of the low- and high-beam headlights. In 2007, Suzuki recalled about 94,000 Forenzas and Renos from the 2004-6 model years, many of the same vehicles recalled on Monday, for the loss of daytime running lights and low beams.

Kenneth M. Bush, Suzuki’s associate director for government relations, wrote in an e-mail that the 2007 recall involved a different wire. Mr. Bush filed both recall notices with the safety agency.

In its filing, Suzuki told the agency the later recall was prompted by an inquiry this year from Transport Canada, the Canadian counterpart to N.H.T.S.A. Transport Canada told the automaker it received 10 complaints about the loss of low- and high-beam headlights. Suzuki said this prompted it to investigate and consequently it concluded a recall was needed.

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Suzuki Starts Arbitration to End Volkswagen Partnership, Buy Back Shares

Suzuki Motor Corp. said it started arbitration procedures aimed at ending its two-year-old partnership with Volkswagen AG and forcing the German carmaker to sell back its stake.

The arbitration will take place at an international court in London, Hamamatsu-based Suzuki said today in a statement to the Tokyo Stock Exchange. Volkswagen said the process can’t force it to sell its 19.9 percent stake in Suzuki, reported Bloomberg.

Each company has accused the other of breaching the cooperation agreement, which was meant to supply Suzuki with technology and provide VW with access to the Indian car market. The carmakers have been at odds since VW described Suzuki as an “associate” in its 2010 annual report. Suzuki said on Nov. 18 it had terminated the partnership with the Wolfsburg, Germany- based automaker, which failed to yield a single joint project.

Suzuki’s move “can be seen as a step toward reaching a conclusion on the partnership,” said Satoru Takada, an auto analyst at TIW Inc. in Tokyo. “If the arbitration process takes long, it may affect the relationships Suzuki and VW have with their other business partners.”

Suzuki rose 0.9 percent to 1,533 yen in Tokyo, compared with a 1.8 percent drop in the benchmark Nikkei 225 Stock Average.

VW has rejected allegations from Suzuki that it broke the cooperation agreement and sees “no legal basis” to return its holding, Eric Felber, a VW spokesman at Wolfsburg, said today in an e-mailed statement.

“We’re confident and look forward to this arbitration procedure with calm,” Felber said.

Suzuki is prepared for the arbitration process to take up to two years to complete, Executive Vice President Yasuhito Harayama said Nov. 18.
“While an arbitration will be legally binding, we think our relationship with Volkswagen may resolve in a friendly manner,” he said.

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VW Blocks Suzuki’s Efforts to Force End to Stalled Partnership

Volkswagen AG rejected efforts by Suzuki Motor Corp. to force an end to a two-year-old partnership that hasn’t yielded a single project.

Suzuki said today that it terminated the cooperation agreement and demanded that VW sell back its 19.9 percent stake in the Japanese manufacturer, threatening to take the dispute to an international court for arbitration. Wolfsburg, Germany-based Volkswagen called the actions “without foundation,” reaffirming plans to retain the holding, reported Bloomberg.

“The glass is broken,” said Arndt Ellinghorst, a London- based analyst with Credit Suisse. “I don’t see any reason why VW should not sell its stake back to Suzuki” as there seems little chance of repairing the relationship.

The two companies have been at odds since VW described Suzuki as an “associate” in its 2010 annual report, published in March. Relations took a turn for the worse after Chairman Osamu Suzuki accused VW of disparaging the Hamamatsu, Japan- based company’s honor by alleging it had violated the 2009 contract by buying engines from Fiat SpA.

Suzuki’s shares fell 2.7 percent to 1,565 yen at the close of trading in Tokyo, compared with a 1.2 percent drop in the benchmark Nikkei 225 Stock Average. VW declined as much as 1.2 percent to 123.15 euros and was down 1 percent at 11:41 a.m. in Frankfurt trading.

Each company has accused the other of breaching their cooperation agreement, which was meant to supply Suzuki with technology and provide VW with access to the Indian car market. VW’s move to back off calling Suzuki an “associate” on Oct. 27 hasn’t quelled the feud.

“In the absence of VW’s cooperation and given its failure to do what was agreed, there is no basis for the partnership to continue,” Chairman Suzuki said today. “We will now work to restore the relationship between Suzuki and VW to its original state as independent parties who do not restrict each other.”

Suzuki, which owns 1.49 percent of VW, last month accused VW of violating a partnership agreement by not sharing technology and sent a letter to VW asking it to remedy “numerous” breaches of an agreement. VW hasn’t agreed to its requests, Suzuki said in today’s statement.

VW responded saying Suzuki’s claims that it didn’t provide access to technology were “factually incorrect” and that it fulfilled its commitments under the agreement.

“We are extremely disappointed that Suzuki has taken this step” to terminate the agreement, the German automaker said in an e-mailed statement. “There is no legal foundation whatsoever obliging us to surrender our shares. Volkswagen will continue to hold its stake.”

The Japanese automaker will give VW “some time” before beginning arbitration outside of Japan and Germany on the shareholdings, Executive Vice President Yasuhito Harayama said at a press briefing in Tokyo today.

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VW Plans to Keep Suzuki Stake

FRANKFURT—Volkswagen AG said on Monday that it intends to keep its 19.9 percent stake in Suzuki Motor Corp. despite persistent calls from its smaller Japanese peer to dissolve their tie-up, indicating that a dispute between the two auto makers is unlikely to be resolved anytime soon.

Volkswagen said it wouldn’t comment on any talks the two hold on the future of their partnership. “The discussion between both parties will be exclusively conducted internally.,” Europe’s largest auto maker said in a statement, reported The Wall Street Journal.

Volkswagen’s remarks are intended to reduce the number of headlines generated in recent weeks by public clashes over the details of the cooperation agreement they signed in 2009. The public spat highlights the difficulties large cross-border deals can suffer because of cultural differences.

Volkswagen acquired its Suzuki stake at the end of 2009 for roughly €1.7 billion ($2.36 billion). It hoped to benefit from Suzuki’s expertise in the important small-car segment and from its large presence in India.

Suzuki said on Friday it had sent a notice to its German counterpart claiming Volkswagen had breached the terms of the companies’ alliance. Volkswagen rejected Suzuki’s allegations, insisting that it had always stuck to existing contracts.

Volkswagen, in turn, has accused Suzuki of breaching their agreement by signing a deal earlier this year to purchase certain diesel engines from Italy’s Fiat SpA.

Despite their agreement, the Japanese car maker has been unable to gain access to Volkswagen’s core technologies, Yasuhito Harayama, an executive vice-president, claimed Friday at a news conference.

“For Suzuki, this was the biggest goal of the alliance. But this hasn’t materialized,” Mr. Harayama said. He declined to disclose other breaches claimed by his company.

Osamu Suzuki, chairman and chief executive at Suzuki, said Volkswagen must return the shares in his company if it doesn’t allow access to its technology.

Mr. Harayama said on Friday that if Volkswagen remains reluctant to discuss the dissolution of the alliance, the Japanese company “may have to consider further action.” He declined to say whether the company would take legal action.

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