HANS GREIMEL

Suzuki's split with VW may have forced its hand in the U.S.

Hans Greimel is Asia editor for Automotive News.Hans Greimel is Asia editor for Automotive News.
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TOKYO — It's a small stumbling block in the mountain of problems plaguing beleaguered Suzuki Motor Corp. in America.

But its ugly fallout with partner Volkswagen made it even more untenable for Suzuki to keep selling cars in the United States.

After splitting with one-time shareholder General Motors, Suzuki courted Volkswagen AG in 2009 as its new global guardian.

VW, with its deep pockets and wide footprint, would help Suzuki with advanced product planning and access to new markets.

Tapping VW expertise in fuel-efficient drivetrain and other advanced technologies was touted as a key element of the alliance, in which VW became Suzuki's largest shareholder.

Suzuki desperately needed that help, especially in electrified drivetrain technologies such as hybrid systems, to stay relevant in advanced markets such as the United States.

The partnership was also envisioned as perhaps someday blossoming into a bond where Suzuki might tap VW's vast retail network or even its manufacturing base in North America.

At least that was the vision.

But it all came crashing down last year, when Suzuki bristled at VW's insistence that the Germans were boss. Relations between the two companies quickly deteriorated into a cold war.

And today, Suzuki has locked VW into arbitration in an attempt to force its estranged German partner to relinquish its 19.89 percent stake. VW has said it has no intention of doing so.

Suzuki's fortunes in North America withered as it grew apart from GM. Its lineup shrank, and it lost its only North American production site, CAMI Automotive Inc. in Ingersoll, Ontario.

Fast forward to 2012, and Suzuki's situation in the United States has only gotten worse – with no signs of a white knight to help it get the technology or market access it needs.

With VW out of the picture, the U.S. pull out was less a strategic retreat than a pragmatic reality. It may have forced Suzuki's hand in a decision that was a long time coming.

You can reach Hans Greimel at hgreimel@crain.com. -- Follow Hans on Twitter

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