MEMANG PATUT PROTON-VOLKSWAGEN JV TAK DITERUSKAN

VW says Suzuki is in breach of agreement

The troubled business relationship between major German automaker Volkswagen and Japan's Suzuki Motor may deteriorate further.

Volkswagen released a statement on Sunday in which it says the Japanese car maker violated its contract by agreeing to purchase diesel engines from another car maker.

The two companies formed a capital tie-up in December 2009 with the aim of jointly expanding their market shares in emerging economies and developing eco-friendly technologies.

Their alliance was stalled in July this year when Suzuki expressed its frustration by saying that the German automaker does not see their partnership as equal.

Volkswagen said that specific joint tie-ups had not progressed as much as it envisaged.

It did not say in the statement that the tie-up should end. It said Suzuki has several weeks to rectify the situation and it continues to view the Japanese car maker as an attractive investment.

However, the relationship is expected to worsen further.

Monday, September 12, 2011 07:08 +0900 (JST)