Joint projects between domestic car market leader Maruti Suzuki India Ltd (MSIL) and German automaker Volkswagen AG are slated to be announced as early as this December. These could include production, design and platform sharing for the Indian market, besides the use of Maruti's extensive supplier and sales network.
Speaking at a conference to announce Maruti Suzuki's second quarter results, Mr Shinzo Nakanishi, Managing Director and CEO, MSIL, said, “The Volkswagen-Suzuki announcement will happen by end of the calendar year, or maximum by January. There are many things being discussed between our parent company in Japan and Volkswagen, though I am not in a position to give any further details.”
In December last year, Volkswagen bought a 19.9 per cent stake for $2.5 billion in Japan's Suzuki Motor Corporation, the parent company of Maruti Suzuki where it has a 54.2 per cent stake.
After this, reports have indicated Volkswagen's interest on a partnership with a focus on India – the second largest growth market globally, where it is a relatively new entrant.
Both companies are expected to design a mutually beneficial global business model. Volkswagen is said to be interested in adopting Maruti's low-cost small car manufacturing systems for emerging markets such as India, while Suzuki may look at the German carmaker's expertise in diesel engines and large sedans.
Maruti Suzuki officials have earlier said that people from Volkswagen's India office have also visited Maruti Suzuki's Manesar facilities to see the production process first-hand. Volkswagen has also set up its own plant at Chakan with a 1.1 lakh unit annual capacity, a contrast to Maruti's around 12 lakh unit annual production.
Volkswagen Group, which initially entered India through the Skoda brand, has followed up with the Volkswagen Cars and Audi.
It sells small cars such as the VW Polo and Skoda Fabia, a portfolio which it may look to expand through new products on Suzuki's platforms.
