Changhe Suzuki cannot possible merge with Changan Suzuki, general manager says

Gasgoo.com (Shanghai November 21) - Changhe Suzuki cannot possibly merge with Changan Suzuki, joint venture General Manager Li Li said in an interview with China Business News. According to Mr. Li, there are irreconcilable differences between the two JV's product lineup that would prevent a successful merger of their sales networks.

Since 2009, Suzuki Motor has reportedly been in constant talks with Changan Automobile Group regarding a joint future for its two Chinese JVs. However, discussions failed to lead to any consensus, with Changan unsatisfied with the company's development proposals. According to reports, Suzuki proposed both joint ventures to be combined under the Changan Suzuki sales network, in order to streamline management control. Changan Suzuki, however, was not confident of the success of taking charge of two operations by itself, deeming that the risks were far too high.

Meanwhile, Changhe Suzuki has continued to develop independently. According to Mr. Li (pictured), the JV expects its Jiujiang, Jiangxi site, which was formed due to an agreement between Changan Group President Zhou Wenchao and municipal authorities, to have a production worth of over 10 billion yuan ($1.58b) by 2015.

Changhe Suzuki has been in the process of changing business models over the past few years. Originally, the JV was under full control of Japanese management, during which it constantly produced losses. It was clear that the Japanese staff was unfamiliar with the intricacies of the Chinese market. Later, Chinese management was given more control, while Japanese executives were relegated to quality assurance and technology departments.