Friday, January 08, 2010: 03:41:29 PM

International Making Headlines

VW unveils its plans to buy stakes in Suzuki

Volkswagen has recently announced plans to buy a 20 per cent stake in Suzuki, the leading Japanese automobile company. Volkswagen will shell out over $2.5 billion for the buyout, which will provide for its expansion in Asia. The decision has been taken to consolidate the position of Volkswagen in Asian markets other than China and will allow the company to compete with Toyota. Around half of the capital raised through the buyout will be invested by Suzuki to buy shares of Volkswagen.



The deal is being seen as a restructuring activity to stabilise the recession-hit auto industry. Automobile companies worldwide are planning to forge alliances to develop green technologies and compact designs and better utilise the combined sales network. Along this line of industry strategies, Volkswagen and Suzuki will also make joint efforts to develop compact and green automobiles. According to Martin Winterkorn, Chairman, Volkswagen, this has been decided taking into consideration the expertise and position of Suzuki in the compact and sub-compact car segment.

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