Suzuki Motor Corp. must stick to what it does best -- being a small-car maker -- even as it forges an alliance with Volkswagen AG that will rank as one of the world's biggest auto empires, its chief executive said Thursday.
Last month, the Japanese automaker signed a deal with Volkswagen for the German automaker to take a 19.9 percent stake in Suzuki for 220 billion yen ($2.5 billion).
The combined annual sales of Suzuki, which makes small cars such as the Swift and the Splash, and Volkswagen, which makes the Beetle and Golf, will total about 8.6 million vehicles, rivaling -- or possibly besting -- the world's top automaker, Toyota Motor Corp.
But the bushy-browed Osamu Suzuki, 79, chief executive and chairman of Suzuki, has long insisted the secret of his company's success lies in its humble, penny-pinching management vision as a small operation.
His company hopes to benefit from Volkswagen's expertise in green vehicles, such as hybrids, electric vehicles and technology to boost fuel efficiency of gas-engine cars, while Volkswagen hopes to benefit from Suzuki's presence in Asia, developing products together and sharing parts, he said.
Suzuki built its empire by selling small cheap cars, especially in Japan and emerging markets. And it wasn't about to turn into a big player, he said at the Foreign Correspondents' Club in Tokyo.
"This approach is totally wrong," he said. "If Suzuki employees start to develop an illusion they are No. 1 in the world, that will lead to a terrible mistake."
Major automakers like Toyota and Volkswagen make vehicles costing between 5 million yen ($55,000) and 8 million yen ($87,000), Suzuki noted. Suzuki cars, in contrast, cost between 500,000 yen ($5,500) and 1 million yen ($11,000).
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