Suzuki denies it has resumed talks with VW

TOKYO (Reuters) -- Suzuki denied media reports that it and Volkswagen Group have resumed talks on how to resolve a dispute about a partnership deal.

"There have been various reports, but there absolutely are no such facts, so there is nothing I can talk about on this topic," Executive Vice President Toshihiro Suzuki told a news conference today after Suzuki reported quarterly earnings.

Suzuki filed for international arbitration in 2011 in a bitter dispute with Volkswagen after the German automaker refused to sell back its 20 percent stake in the Japanese firm.

VW paid 1.7 billion euros ($2.3 billion) for the stake in January 2009 in a deal that was supposed to give VW a strong foothold in the growing Indian market and Suzuki access to fuel-saving technologies.

The alliance went sour when VW said Suzuki had broken their contract by deciding to procure diesel engines from Fiat. Suzuki accused VW of withholding hybrid powertrain technology it promised to share and demanded VW return its stake. Volkswagen refused.

Reports said the two carmakers have resumed talks at the board level and both continue to view the industrial logic for the cooperation as compelling. VW Chairman Ferdinand Piech and Suzuki President Osamu Suzuki are involved in the effort to reach an agreement, Bloomberg reported on July 26.

Record profit

Suzuki posted 44.1 billion yen ($448 million) in April-June operating profit today, a record for its first quarter, after increased car sales in Indonesia and Thailand offset a slowdown in India, its biggest market. Its subsidiary, Maruti Suzuki, is India's biggest carmaker.

Suzuki said its car sales in India in April-June dropped 10 percent due to an economic slowdown and a drop in popularity of diesel-powered vehicles.

For its full fiscal year, Suzuki raised its operating profit forecast by 10 percent to 165 billion yen, helped by the weaker yen.

Bloomberg contributed to this report