Bloomberg News

Suzuki Motor Declines to Disclose Response From Volkswagen

September 30, 2011

(Updates with spokesman’s comment in second paragraph.)

Sept. 30 (Bloomberg) -- Volkswagen AG has replied to Suzuki Motor Corp.’s demand that it retract an allegation that Suzuki infringed a partnership agreement, the Japanese automaker said.

The German automaker’s response “is not worthy of comment,” Hideki Taguchi, a spokesman for the Hamamatsu, Japan- based Suzuki, said by telephone today. He declined to expand on the details of VW’s reply.

Suzuki had demanded VW, Europe’s largest automaker, retract by today its allegation that the Japanese company violated a cooperation agreement by purchasing engines from Fiat SpA. Suzuki said it never breached the VW agreement, which it is now trying to end.

“The facts haven’t changed for Volkswagen,” said Michael Brendel, a spokesman for the German automaker in Wolfsburg, declining to comment on the contents of its response to Suzuki.

VW’s allegation that Suzuki’s purchase of diesel engines from Fiat broke their cooperation agreement “significantly disparaged Suzuki’s honor,” Suzuki Chairman Osamu Suzuki said Sept. 22.

VW owns a 19.9 percent stake in Suzuki worth 222.5 billion yen ($2.9 billion), and their cooperation agreement hasn’t resulted in a single project. The two have been at odds since the Wolfsburg, Germany-based carmaker said in its March annual report that it could “significantly influence financial and operating policy decisions” at Suzuki, describing the Japanese company as an “associate.”

The Japanese automaker, which owns 1.49 percent of VW, plans to sell its holdings if the tie-up ends, the company said Sept. 12. VW has said it doesn’t plan to sell or reduce its stake in Suzuki.

--With assistance from Yuki Hagiwara in Tokyo. Editors: Nicholas Wadhams, Suresh Seshadri.

To contact the reporters on this story: Anna Mukai in Tokyo at amukai1@bloomberg.net; Chris Reiter at creiter2@bloomberg.net

To contact the editors responsible for this story: Kae Inoue at kinoue@bloomberg.net; Chad Thomas at cthomas16@bloomberg.net


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