FRANKFURT/TOKYO (Bloomberg) -- Volkswagen AG and Suzuki Motor Corp. are exploring options to either revive cooperation efforts or enter a settlement to end a two-year legal battle over a failed partnership, people familiar with the matter told Bloomberg.
Senior executives on both sides, including Suzuki President Osamu Suzuki, are involved in the effort to reach an agreement, said the people, who asked not to be identified because the talks are private. VW and Suzuki continue to view the industrial logic for the cooperation as compelling, one person said.
The effort may still fall apart and legal proceedings at a London-based arbitration court over the future of the disputed alliance will go ahead if the talks fail, the people said. Eric Felber, a VW spokesman, and Ei Mochizuki, a Suzuki spokesman, declined to comment on any possible discussions between the two.
"Both companies stand to benefit if they can overcome the disagreements over leadership claims," said Frank Biller, a Stuttgart-based analyst at LBBW. "VW and Suzuki would still complement each other very well."
VW became Suzuki's largest shareholder when it acquired a 19.9 percent stake for 1.7 billion euros in 2009. Suzuki in return bought VW stock worth about 770 million euros as part of the deal, which was brokered by Osamu Suzuki and VW Chairman Ferdinand Piech. The plan to join forces to cooperate on small, fuel-efficient cars for emerging markets collapsed two years later, with both carmakers accusing each other of breaching the agreement.
In its bid to become the world's biggest carmaker, VW aimed to boost its presence in India through the tie-up with Suzuki, which controls Maruti Suzuki India Ltd., the country's largest carmaker. VW also sought to benefit from the Japanese manufacturer's expertise in compact vehicles. Suzuki planned to reap cost synergies by teaming up with VW and gaining access to its technology.
Cooperation efforts were terminated before the companies agreed on a single project. Suzuki in 2011 demanded VW return its stakeholding and filed a lawsuit at a London arbitration court. VW said in its 2012 annual report the court case "is not expected to reach a decision until mid-2013 at the earliest."