VW Buys 20 Percent of Suzuki

News service Reuters reported that Volkswagen, the No.1 carmaker in Europe, has agreed to buy a 1/5 stake in Suzuki Motor Corp. for $2.5 billion. VW and Suzuki plan to jointly develop vehicles for emerging markets and aim to challenge the global leader in vehicle production, Toyota Motor Co.

The move gives Volkswagen a stronger presence in two of the emerging world markets, India and China.

Suzuki is Japan’s fourth-largest carmaker and is third globally in motorcycle production. How this new partnership will affect Suzuki’s motorcycle production, which accounts for 16.9% of Suzuki’s net sales, remains to be seen.

The arrangement will give VW access to Suzuki’s small car and motorcycle technology while Suzuki will benefit from Volkswagen’s engineering advancements in hybrids and electrics.

Suzuki is the tenth brand the automotive manufacturer has teamed with. Volkswagen’s other investments include Audi, Bugatti, Bentley, Lamborghini, SEAT, Skoda, Scania and other Volkswagen Commercial Vehicles. It also just made a move last week to acquire Porsche AG.