Suzuki to VW: Provide technology access or dissolve partnership

Japan's Suzuki Motor stepped up the battle with its two-year-old German alliance partner Volkswagen AG (VW) and demanded access to its technologies within weeks or dissolve the partnership pact.

Suzuki, Japan's fourth-largest automaker yesterday served VW with a notice of breach of contract saying that VW withheld sharing hybrid technology it had promised and demanded it be given access to key technologies within weeks or the Wolfsburg, Germany-based car maker should sell back its stake in Suzuki and quit the alliance.

''This capital alliance was intended to facilitate Suzuki's access to VW's core technologies,'' Suzuki's chairman Osamu Suzuki said in a statement. ''I remain disappointed that we have not received what we were promised. If VW will not allow access it must return Suzuki's shares.''

"The notice requires that VW remedies numerous breaches of the companies' Framework Agreement," the statement said.

VW currently holds 19.9-per cent of Suzuki's shares, while Suzuki holds 2.5 per cent of VW.

With an eye on India, one of the fastest growing car markets, in December 2009 VW paid $2.5 billion for a 19.9-per cent stake in Suzuki, to develop and manufacture energy-efficient small cars in emerging markets.