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VW-Suzuki marraige on rocks; Suzuki - FIAT getting closer

Discussion in 'Fiat India News' started by bnzjon, Jul 21, 2011.

  1. Interesting article - Good for FIAT in India ?

    http://www.thehindubusinessline.com/companies/article2277277.ece

    Mumbai, July 20:

    With tension brewing between Volkswagen and Suzuki, the India script for this global alliance may just turn awry.

    Nearly 20 months ago, VW and Suzuki got into an equity crossholding deal which promised plenty. The German carmaker was hopeful that it would translate into a slew of compact cars for India while Suzuki was guaranteed access to its ally's large array of diesel engines. Over the last few weeks, it is getting increasingly apparent that the duo is tiring of the partnership which has yielded nothing on the ground yet.

    According to auto industry observers, it may be a tad premature to write an epitaph though the spark is clearly missing. Media reports have cited a cultural mismatch as the prime trigger.

    As far as India is concerned, Suzuki (via Maruti) remains a force to reckon with in the small car segment. Its growing need for diesel engines is expected to be met by Fiat from its Ranjangaon plant near Pune, which clearly means that VW's services are not required in this department.

    Does this signal the possibility of a new alliance emerging between Suzuki and Fiat?

    Speculation has been rife that the two will now team up for diesel engines and also pool their skills in fuel-efficient compact cars, the road for the future.

    With Chrysler also in its kitty, it will be interesting to see how Fiat leverages Suzuki's presence should this turn into an equity-based partnership.

    From VW's point of view, a separation with Suzuki may be of little consequence even in markets like India where it is a relatively late entrant.

    The German carmaker has been investing heavily in building its brand here and is generating good numbers for its Polo and Vento cars. It would also be looking at a long-term strategy where recent acquisitions like MAN will play a key role in India's commercial vehicle segment.

    Incidentally, Fiat and Suzuki had a common ally in General Motors, although at different points in time.
    The relationship between GM and Suzuki was so strong at one point that it was widely thought that the former would have a strong role in Maruti. Mr Osamu Suzuki, Suzuki Motor Corp Chairman, had hinted in 2000 that GM would be the natural ally in India by virtue of its (then) 20 per cent stake in his company.

    Govt stake
    Then, the Indian Government was a prominent stakeholder in Maruti and it was assumed that GM would step into this role once the company was privatised.

    Events took a dramatic turn soon thereafter when Daewoo was up for sale and GM snapped it when Ford, originally the highest bidder, backed out.

    GM and Suzuki subsequently ended their promised alliance for India and parted ways at a global level too.
    As in the case of Volkswagen -Suzuki, a lot was expected from the alliance between GM and Fiat which had a similar crossholding model. Nothing came of it eventually and the divorce was inevitable.
  2. sungoa2010

    sungoa2010

    Messages:
    2,878
    Goa
    If Fiat can make use of the Maruti service network then it will be definitely a boost for the company.
    Last edited by a moderator: Jul 23, 2011
  3. royj

    royj Esperto

    Messages:
    1,306
    Trivandrum
    The number of service centres would be more, but I really doubt whether there will be any noticeable improvement in quality of service. It would still be more or less the same, however the public perception could change drastically and that is all what matters.
  4. Sumit

    Sumit Superiore

    Messages:
    607
    Munger
    i think its the best alliance that can happen in india. Maruti is famous for its ASS and Fiat produces the best engines( petrol and diesel ) world wide. if they come under one roof its really going to rock.

    Make it happen, and best of luck to both to make it happen. :clapping:clapping:clapping
    Last edited: Jul 21, 2011
  5. varoon9999

    varoon9999 Superiore

    Messages:
    769
    New Delhi,HP 48
    New Delhi,HP 48
    Grande Punto 1.3

    doesn't sound so great...

    if at all this alliance takes place again scenario gonna be same for fiat cars.....maruti people push for maruti cars only...........

    until FIAT starts something on their own things will never change for fiat's future in India..........
    Last edited: Jul 21, 2011
    atulkumbhar likes this.
  6. Sumit

    Sumit Superiore

    Messages:
    607
    Munger
    yes obviously Fiat has to work harder even then.they cant sleep all the time and dream that its sales figures will double overnight.
  7. This can not happen that easily as TATA has invested 50% of JV for FIAT cars and FIAT plant is being used to manufacture Vista and Manza too.
  8. sungoa2010

    sungoa2010

    Messages:
    2,878
    Goa
    Renault has realized that it will get vanished away with Mahindra label. So it is also possible for Fiat. At least for the new launches. There is a possibility of technical collaboration. With Tata is there any joint-research collaboration?
  9. deepakhon

    deepakhon Amatore

    Messages:
    68
    Bangalore
    I doubt whether it will go to the merger level with Fiat and Suzuki. Remember that Suzuki is unhappy with VW because VW is not treating them as an equal partner. I doubt whether there will be any more co-operation apart from engine sharing, which is already happening now. Maybe, there could be synergies in sharing petrol engines too, but apart from that, I have my doubts. There could be platform sharing too - like Sedici and SX4. However, with Fiat having Jeep in their portfolio, even this looks difficult.

    Also, Fiat is neck deep with Tata on the partnership in India. It will be one huge task to come out of it, if it ever happens.
  10. jishnu

    jishnu Superiore

    Messages:
    651
    Bangalore
    Maruti ASS sales support and Fiat Engines+Cars= Best Possible things on Indian roads! :D
    asimpleson likes this.

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