Automotive News

Shanghai, July 28 (Gasgoo.com) SAIC Motor Corp yesterday denied the latest media report that it would create a three-way joint venture in China with Volkswagen AG and Suzuki Motor who have formed a strategic partnership.

On Sunday, Chinese media reported that Suzuki planned to buy into Shanghai VW, the flagship venture between Volkswagen and SAIC, to speed up Suzuki's expansion in the Chinese market, and the three companies were discussing the matter, according to an executive from Suzuki's Chinese partner Changan Auto.

Suzuki Motor yesterday also said in a statement that the report about its planning a three-way JV with Volkswagen and SAIC was groundless while a public relations official from Volkswagen China said he was unaware of the matter.

Suzuki has been in talks with several Chinese firms for creating a new local venture. In March, Suzuki China relocated its 15-year-old office in Beijing to Shanghai's Anting town, where Shanghai VW is based. In December, Volkswagen paid $2.5 billion for 19.9% stake in Suzuki Motor.

Suzuki entered China in 1993 and has developed slowly here. It has blamed a weak partnership and lack of understanding of market demand. Last year, its sales reached 250,000 units in China after selling less than 200,000 units in 2008.

Setting up a new joint venture may make it easier for Suzuki to break the bottleneck on sales than to improve Changan Suzuki and Changhe Suzuki's current performance, an analyst said.