Tata and Fiat got into a JV couple of years ago. With the JV, Tatas got the technology from the Fiat and in turn Fiat which lacked the sales and service in India got a channel to sell and service their cars in a better way. Fiat though makes world class cars, could not make a big intact in India from past 10 to 15 years due of lack of its after sales services. Now with the JV, Fiat has sold a substantial number of its newly launched cars Grande Punto and Linea.
This could set a great example for VW and Suzuki. Suzuki has a vast dealership network in India and VW is relatively new here. Setting up of good number of dealerships will consume both time and substantial cost. So it could be better for VW to share the dealerships with Suzuki. Suzuki can in turn get the diesel technology which it lacks in its portfolio. This could to be a win-win situation for both the companies if the JV is worked out well.
VW and Suzuki tie up story
German and Europe’s largest carmaker Volkswagen bought 19.9% stake in the Japanese third largest carmaker Suzuki couple of weeks ago by purchasing shares of Suzuki worth $ 2.5 billion. Suzuki had its strength in small cars and for Volkswagen to become the world’s largest carmaker its needs small cars in its portfolio.
On the other hand Suzuki will be benefited from VW’s diesel engines and sell its cars in Europe from which the company gets 57% of its revenue. Of $2.5 billion dollars, Suzuki will use half of the money to clear its debts and invest in development of next generation technology like electric, hybrid, low emission and low cost vehicles as well.
One country which will be greatly affected from VW and Suzuki tie up will be India. Global makers are eying Indian market and are expecting their growth here for next decade. With the two company joining hands, both will be benefited in what could be the higly competitive automobile market in the world for sure in coming days.
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