Volkswagen Buys Suzuki Stakes, Targets World Number 1

Germany’s Volkswagen (VW) will buy 19.9% or one-fifth of the shares of Japanese carmaker Suzuki that in turn will also acquire a stake in Europe’s largest automaker. The stakes cost VW $2.5 billion.suzuki-kizashi-car

VW will expand its sales portfolio in Asia, after having its presence felt in China, with Suzuki’s big shares in Japan and India. It has 10 brands already, including Audi, Skoda, Seat and the latest Porsche which last month help propel VW to the stop spot as world’s largest automobile maker dethroning Toyota, another Japanese car maker. The next target is to have 12 brands by 2011 and world number one car in 2018.

The trade will help Suzuki produce in its lineup its own hybrid and electric cars, a technology that VW has. VW meanwhile, is gearing up for Suzuki’s expertise in small cars.

“In partnership with Suzuki, the VW Group can take a big step forward in the compact car segment, particularly in the emerging markets in Asia,” CEO Martin Winterkorn said. “In turn, Suzuki can benefit from our experience with efficient and environmentally friendly drive train and vehicle technologies.”