Volkswagen AG, the family-controlled car manufacturer, announced today it plans to take a 19.9% stake in the Japanese car company Suzuki Motor Corporation.
The move is an attempt to access the emerging Asian markets, particularly the Indian market, in VW's quest to become the world's largest automaker.
In a press conference in Tokyo yesterday, VW's non-family CEO Martin Winterkorn said: "In partnership with Suzuki, the VW group can take a big step forward in the compact car segment, particularly in the emerging markets in Asia. In turn, Suzuki can benefit from our experience with efficient and environmentally friendly drive and vehicle technologies."
The sum VW will pay for the Suzuki stake was not disclosed by either company, but news agencies put the figure at around $2.5 billion.
This news comes just two days after VW announced it has completed the acquisition of a 49.9% stake in Porsche, the latest step towards a merger of the two companies. VW paid €3.9 billion for the acquisition.
Porsche and VW are headed by rival branches of the same family; Porsche is lead by Wolfgang Porsche and VW by Ferdinand Piech (pictured), both grandsons of Porsche's founder. Wolfgang Porsche originally envisioned his smaller company could takeover VW, and so began building up shares in his cousin's business. However, this drove Porsche into €10 billion of debt and left the smaller company in need to financial help from VW to save the family business. (Click here to read our ongoing coverage of the story)
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