Global Coalition between Volkswagen and Suzuki

Posted by admin on August 10, 2010

Global Coalition between Volkswagen and Suzuki

: Image via Wikipedia

As the final stages of the massive global coalition between Volkswagen and Suzuki Motor there is another expansive deal set to take place within VWC . Now Maruti Suzuki is set to become an original equipment manufacturer for Volkswagens growing cars and vans market.

Maruti Suzuki may forge a manufacturing deal with Volkswagen and the deal could be on the lines of its tie-up with Nissan, Japan’s fourth-largest car maker.

“Talks are on with Volkswagen. Collaboration can happen in production and product planning between the two companies. The possibility is that we will act as the original equipment maker (OEM) to Volkswagen,” said Shinzo Nakanishi, managing director and chief executive officer of India’s largest passenger vehicle manufacturer.

Maruti Suzuki is a very popular for its Pixo hatchback, a strong line for Nissan. With the company producing close to 35,000 units for Nissan.

Volkswagens aggressive expansion amidst the recession continues to benefit them, last year a buy up of nearly 20 per cent in Suzuki Motor at $2.5 billion only furthers to strengthen their plans to break into smaller economical cars and foreign markets.

There are no specifics of what the coalition between VWC and Maruti will produce at this time, but a few sources said since Suzuki specializes in building small economical cars and vans throughout India and Japan , products for Volkswagen would most certainly be built for the same category.

“There are several existing products with Suzuki, as well as product programmes from Volkswagen, which can be explored for this purpose. There are several opportunities which can be properly explored,” said a Maruti executive.

There are rising concerns over rising fuel costs and stricter emission standards, smaller cars essentially are the market in Europe. Densely populated markets like India and Japan also continue to be strong production bases for Suzuki, with the company targeting cost efficiency and small size over anything else.

Maruti Suzuki is also set to some large expanding with plans to increase production capacity by 50 percent (1.5 million units) sometime in the next five years. This comes after the positive news that the manufacturing target of one million units was achieved last year.