Volkswagen Drops Alliance Plan With Maruti Suzuki

As we had reported earlier Volkswagen, one of the world’s leading manufacturer was keen on getting into an alliance with Maruti Suzuki but now the brand has disposed off this plan. This decision followed Suzuki’s keenness on dissolving a two year old alliance with Volkswagen AG.

Earlier Volkswagen was keen on sourcing the Maruti A-Star and then after making some modifications, selling the same car with a different brand name. This new strategy came up after Nissan successfully started importing the A-Star and started selling it. Volkswagen currently holds 20 % stake in Suzuki but after the latter put forward his plan of dissolving the alliance, even the former retaliated in a similar manner has dumped its future plans.

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Instead now the brand is all set to launch the Volkswagen Up small car in India to strengthen its portfolio. After the success of its hatchback Volkswagen Polo, the German manufacturer is pretty sure to get a good response from the Up. Another fact is that the Indian market is the world’s second fastest growing market and this would be the best time to enter the small car market with a good car.

The dissolution of the alliance between Suzuki and Volkswagen, where the latter accounted for 19.9 % of the total stake, took place on 12 Sep 2011. Maruti Suzuki is now looking forward to adopting Fiat CRDI diesel engines and is no more interesting in the diesel technology available with Volkswagen.

Volkswagen India President John Chacko recently said, “We are completely focused to expand out network in India and introduce many more small cars in the country.”

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Maruti Suzuki India News

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