After a two year alliance between Volkswagen and Suzuki, relations and communication quickly deteriorated earlier this September after Suzuki had gone to Fiat to supply their engines. Volkswagen, upset at the deal, very publically claimed it was a serious breach of Suzuki’s contract.

Now, Suzuki Chairman and CEO, Mr. Osamu Suzuki, is demanding Volkswagen to withdraw the claim, as it stains Suzuki’s global reputation and public image. Osamu also insists that the deal with Fiat does not violate any contractual agreements with Volkswagen.

According to Suzuki, the matter of buying Fiat engines had been discussed with Volkswagen back in January and both sides accepted the terms. The reason behind the deal is Suzuki’s need of an engine that would meet specified parameters for their Sx4 compact. Fiat had such a 1.6 liter diesel engine available while Volkswagen did not.

The unraveling relations have accelerated as a very upset Osamu Suzuki says, “Volkswagen’s notice and press release hinder our effort to develop attractive new products and significantly disparage Suzuki’s honor. I think you can share my view why Suzuki would like to dissolve partnership and cross-shareholding relationship with Volkswagen.”

Volkswagen currently owns a 19.89 percent share of Suzuki while Suzuki holds 1.49 percent of VW. Initially expecting benefits from the alliance, Osamu is frustrated by two years of, “Ball and chain for our managerial independence.” Osamu intends for Suzuki to abandon its 1.49 percent holdings of VW and demands that VW sell all 19.89 percent of its stake in Suzuki as well.

While it is clear that Suzuki is stubbornly convinced their relationship with Volkswagen has come to an end, VW has no intention of selling their stake in Suzuki. Earlier this week, Volkswagen also announced their ambitions to grow into a larger automaker.

[Source: Automotive News]

Volkswagen will halt its practice of acquiring auto makers as a means of boosting its total sales volume, according a report by Bloomberg.

With Volkswagen in place to become the world’s second largest automaker, the company’s massive stable of brands, which includes Volkswagen, Audi, SEAT, Skoda, Lamborghini, Audi and Bugatti, will remain static, with VW hoping to simply sell more cars.

Volkswagen has recently seen its alliance with Suzuki go down in flames, and has struggled to take control of long time technological partner Porsche.

[Source: Automotive News ]

It’s official, the proposed alliance between Suzuki Motor Co. and Volkswagen AG is now dead in the water. On Sunday; VW said that the Japanese company’s decision to source diesel engines from Fiat, was an infringement on the terms of the deal between it and VW.

As a result today, in Tokyo, during an unscheduled board meeting, Suzuki has decided to terminate its alliance with VW, citing that the deal is having an increasingly negative impact on the Japanese company; especially relating to independent management decision making at the highest level.

Currently; Volkswagen has 19.9 percent interest in Suzuki, while the the latter has just a 1.49 percent stake in the German giant. With the alliance deal now off the cards, Suzuki is hoping that VW will sell its shares in the company, though an official line from Wolfsburg is that VW has no intention of selling shares, nor reducing its stake in the Japanese automaker.

The Suzuki/VW partnership has been troubled from day one; the original plan was for both automakers to cooperate in the areas of technology, including hybrid vehicles as well as develop expansion plans into emerging markets. However, two years later, no such projects have come to fruition.

In addition, Suzuki has felt that increasingly, its role in the partnership was becoming overshadowed by VW; while the latter believes that the Japanese concern has been less than transparent in some of its dealings, especially relating to Fiat which is reportedly looking to form its own alliances with rival automakers.

Nonetheless VW believes that an alliance is still possible, though remains very much “under review.”

The real prize for VW is Suzuki’s dominance in India where its Maruti-Suzuki operation is the market leader; estimates predict that by the end of this year M-S will sell some 36 percent of 3.07 million vehicles delivered in that country. In addition, Indian vehicle sales are expected to increase over the next five years to around 5.47 million units per annum, so any chance to get in on the action presents a potentially huge opportunity for rival carmakers, even if it is through alliances or joint ventures.

Yet while VW remains at least lukewarm to the idea of an alliance between the two companies, Suzuki Chairman; Osamu Suzuki, in a Nikkei newspaper article; wrote that, “he hasn’t found any VW technologies he’d like to adopt following an extensive review of what they have to offer.”

[Source: Automotive News]

As a brand Suzuki has had limited success in North America, selling rebadged GM crossovers when it probably should have been pushing the types of cars it knows best – small cars. While the Swift used to be offered here, its days passed long ago (apart from the rebadged old Daewoo offered in Canada).

The Swift soldiered on in other markets, however, and has evolved into a solid machine. And now Suzuki is adding more style and performance by introducing a new Swift Sport model for 2012 at the 64th International Motor Show in Frankfurt. This new model, which is just an update to the current Swift model sold in Europe and Asia, gets a larger grille in the front, and ground effects and spoilers which according to Suzuki “suppress lift and give the car a lower visual center of gravity.” You also get new 17-inch alloy wheels wearing 195/45R17 tires. HID headlamps and new tail lights complete the fresh new look.

Sporty seats and a five-dial instrument cluster add to this cars sporty character on the inside. However, the changes under the hood are what enthusiasts will be lusting after. The Swift Sport gets Suzuki’s new M16A motor, which produces 8% more power while also improving fuel consumption by 11%. This 1.6-liter, four-cylinder unit produces 134 hp and 118 lb-ft of torque.

Power goes to only the front wheels via a new six-speed manual gearbox which features a triple-cone synchromesh for a more sportier feel.

To keep you safe, electronic stability control is standard along with 7-airbags.

So if you’re moving to Europe and are looking for a fun new hatchback to drive around in, the new Swift Sport will be on sale very shortly. Just don’t look for it at your local dealer… pity.

Look for more details tomorrow at AutoGuide’s official Frankfurt Auto Show page here.

GALLERY: Suzuki Swift Sport

With the Volkswagen/Suzuki tie-up all but officially over, the latest move by Volkswagen is sure to end it. After its first full review of the “partnership” Volkswagen has announced it is, “serving notice of an infringement by Suzuki of the cooperation agreement.”

The reason for the notice is a result of Suzuki’s decision to purchase diesel engines from VW rival Fiat, which, claims the German automaker, “contradicts the terms of the cooperation agreement.”

Volkswagen has said it has offered to discuss the matter with Suzuki but said the filing was necessary, giving Suzuki a period of several weeks to “remedy the infringement.”

Back in December of 2009 the two automakers announced the tie-up, which was supposed to see Suzuki gain technology from VW, in return for insight and cooperation by Suzuki into emerging markets like India. VW also purchased a 19.9 percent stake in the Japanese automaker.

Perhaps adding insult to injury, in a release by Volkswagen, the German automaker says the “partnership” is not over yet, referring to Suzuki as, “an attractive investment.” That’s not likely to sit well with Suzuki execs. (Didn’t we say you should expect divorce papers soon?)

Young love can turn into a bitter divorce faster than you can say “Rocktan.” That at least appears to be the case with the relatively recent partnership between Germany’s world-domination seeking Volkswagen and the minicar experts from Japan, Suzuki.

Like many a relationship gone sour, the problem appears to be communication.

“Volkswagen is not talking to us,” said chairman Osamu Suzuki. “”We have no plans to talk to them.”

Suzuki also accuses VW of speaking directly to the media, rather than with executives at the Japanese automaker. The divide between the two reportedly began when Volkswagen announced it could, “significantly influence financial and operating policy decisions” at the Japanese automaker.

Suzuki’s response has been swift, announcing that, in retrospect, it’s not interested in any of VW’s technologies, following through on that statement by opting to purchase diesel engines from rival Fiat.

The tie-up was first announced in 2009, with VW spending $2.9 billion for a 20 percent stake in Suzuki. The plan was cooperate on electric and hybrid technology while VW hoped to tap into Suzuki’s success in emerging markets like India, where last year the Japanese automaker sold 1.13 million vehicles compared to VW’s 53,000.

Officially the two automakers are continuing to live in the same house, but somebody’s sleeping on the couch. And as they’re certainly not sticking together for the kids (in two year’s not a single joint project has been developed), look for someone to file divorce papers soon.

[Source: Bloomberg]

In 2010, Volkswagen took a twenty-percent stake in Suzuki, and virtually no progress has been made from the alliance since then. Neither side has been thrilled with the coalition and the two automakers have even stated cultural differences as being a factor in the failed relationship.

Both automakers had different goals: VW wanted to expand into the Asian small-car market, while Suzuki wanted to take advantage of VW’s expertise in diesel, hybrid, and electric cars. As a result, Suzuki may be looking to take its talents to Italy.

Currently, Suzuki has made a deal with Fiat to supply the SX4 crossover for rebadging as the Sedici in Europe. Sources have indicated that Suzuki is looking for ways to further its relationship with Fiat, however the Italian automaker has not indicated whether the feeling is mutual.

As it stands, the Japanese and German automaker have clearly expected more out of this partnership, yet neither are progressing. Suzuki and VW are likely to split but the Japanese automaker has more to lose, so expect to see a move sooner rather than later.

[Source: Truck Trend]

Each market has its favorites when it comes to cars. People in the Middle-East prefer powerful SUV’s like the Mercedes-Benz G-class, while in America the pick-up truck reigns supreme, especially the Ford F-150.

In Japan, the most popular car is neither big, nor powerful, but it fills the needs of most of its motorists. Since 2003, the most popular car sold in Japan is the Suzuki Wagon R.

The Wagon R is a kei-class vehicle, which means it fits in Japan’s stringent “Kei” segment. Cars in this segment, the smallest road-legal cars available. Kei cars cannot have engines larger than 660 cc, can be no longer than 11.2 feet, should have a maximum width of 4.2 feet and cannot be taller than 6.6 feet.

Despite such restrictions, all major Japanese manufacturers offer cars in this segment. And just because they are small, don’t think they have skimmed on equipment either as all-wheel drive, turbocharged engines and all sorts of electronic gizmos are available.

Between the generous equipment levels, tax breaks and fuel savings these cars provide kei-cars have become wildly popular in Japan. According to “The Japan Mini Vehicle Association” more than 50% of the cars on Japanese roads are now kei-cars. Not only are these cars popular in city centers, but the survey reveals that even in rural areas people prefer smaller vehicles.

The least popular city for such cars is the metropolitan city of Tokyo, where only 11% of household owns kei-cars, while in Tottori Perfecture, 98% of households own kei-cars.

Since fuel prices and congestion in big cities is ever increasing in North America, would this trend catch on here? We highly doubt it.

[Source: Green Car Reports]

Suzuki has been very successful with sales up 17 percent year-to-date for 2011, and hopes to maintain the momentum into 2012. Suzuki has updated the Grand Vitara with the “Ultimate Adventure Edition” which arrives for 2012. The new edition will feature 18-inch alloy wheels, water-resistant seat fabric, a leather-wrapped steering wheel and integrated fog lamps.

So far, no photos have been realeased however the UAE model will not be the only change for 2012.  Grand Vitara models will also get an new tailgate design that will see the model shed its trademark rear-mounted spare tire. Interior updates will also feature an upgraded navigation system including voice recognition, traffic info, 3D map lane guidance and Google Local Point of Interest Search.

Suzuki’s Kizashi mid-size sedan has also experienced terrific sales momentum, up 47 percent year-to-date and will also see some updates. First off, the sedans price tag will not change ($18,999), but new touches include a new high-value leather trim featured as the new SE Leather Edition, and starts $2,000 lower than the top of the line SLS model.