A full takeover of Suzuki Motor by Volkswagen is seen as unlikely after the Japanese company sought a divorce from a two-year partnership with Europe's biggest automaker.an unnamed senior manager at VW as saying he did not rule out a full takeover of Suzuki, shortly after two months of squabbling between the two companies came to a head.
VW cannot raise its stake in Suzuki without the Japanese company's consent as long as the alliance between the two companies is still in place. But if Suzuki cancels the partnership, VW would be free to stock up, it said.
Commerzbank analyst Daniel Schwarz said such a move was unlikely. "First of all, (Suzuki chairman and CEO) Osamu Suzuki would not want to sell. VW simply won't be able to take over all of Suzuki against his will," he said.
Suzuki said last week it wanted to end its two-year alliance after the German carmaker accused it of violating the pact by agreeing a diesel engine supply deal with Fiat.
Osamu Suzuki offered to buy Volkswagen's 19.9 percent stake in his company with cash on hand, but VW said it was happy with its investment and had no intention of selling.
"I think it is rather unlikely that Volkswagen will go for a hostile takeover of Suzuki," Macquarie Research analyst Christian Breitsprecher said.
The Volkswagen-Suzuki alliance was billed as a partnership of equals when it was formed in 2009 to bolster VW's presence in India for small cars, and give Suzuki access to hybrid and diesel technology it could not afford to develop on its own.
Analysts saw the tie-up as VW's best option to tap the Indian market, where car sales jumped by 30 percent in the last fiscal year, but VW last week put on a brave face, saying it could go it alone on the subcontinent.
Suzuki's move adds to a growing list of failed alliances in the car industry, the most spectacular of which was Daimler's ill-fated tie-up with Chrysler, which it ended four years ago, swallowing a $30 billion loss.
"Generally speaking, there are very rare instances of auto alliances being successful unless one side buys a considerable equity stake in the other," Commerzbank's Schwarz said.
Theoretically, it would make sense for VW to increase its stake in Suzuki, he said, but after relations between the two companies soured that possibility is dim at best.
VW cannot raise its stake in Suzuki without the Japanese company's consent as long as the alliance between the two companies is still in place. But if Suzuki cancels the partnership, VW would be free to stock up, it said.
Commerzbank analyst Daniel Schwarz said such a move was unlikely. "First of all, (Suzuki chairman and CEO) Osamu Suzuki would not want to sell. VW simply won't be able to take over all of Suzuki against his will," he said.
Suzuki said last week it wanted to end its two-year alliance after the German carmaker accused it of violating the pact by agreeing a diesel engine supply deal with Fiat.
Osamu Suzuki offered to buy Volkswagen's 19.9 percent stake in his company with cash on hand, but VW said it was happy with its investment and had no intention of selling.
"I think it is rather unlikely that Volkswagen will go for a hostile takeover of Suzuki," Macquarie Research analyst Christian Breitsprecher said.
The Volkswagen-Suzuki alliance was billed as a partnership of equals when it was formed in 2009 to bolster VW's presence in India for small cars, and give Suzuki access to hybrid and diesel technology it could not afford to develop on its own.
Analysts saw the tie-up as VW's best option to tap the Indian market, where car sales jumped by 30 percent in the last fiscal year, but VW last week put on a brave face, saying it could go it alone on the subcontinent.
Suzuki's move adds to a growing list of failed alliances in the car industry, the most spectacular of which was Daimler's ill-fated tie-up with Chrysler, which it ended four years ago, swallowing a $30 billion loss.
"Generally speaking, there are very rare instances of auto alliances being successful unless one side buys a considerable equity stake in the other," Commerzbank's Schwarz said.
Theoretically, it would make sense for VW to increase its stake in Suzuki, he said, but after relations between the two companies soured that possibility is dim at best.
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