Suzuki sets 30 September deadline to VW to retract allegation

Japanese car maker, Suzuki Motor Corp continued its public spat with its German joint venture partner by asking Volkswagen AG (VW) to make a public retraction by 30 September its allegation that it had violated their partnership contract.

In a letter yesterday to VW Chief executive officer Martin Winterkorn, Suzuki CEO Osamu Suzuki said , ''Suzuki never breached our Agreement. Volkswagen's notice and press release hinder our effort to develop attractive new products and significantly disparage Suzuki's honor.''

VW, one of the world's leading automobile manufacturers, had sent a notice on on 11 September to Suzuki alleging infringement of their agreement over the supply of diesel engines produced by another manufacturer, without naming the manufacturer.

Although VW did not name the other manufacturer, the German firm was pointing a finger at Fiat S.p.A, from whom Suzuki had agreed this year to diesel engines.

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

At the time of inking the pact, Suzuki, Japan's fourth-largest automaker, said it planned to procure diesel engines from Volkswagen, adding that the two companies would also look increasingly at possibilities of a common platform for parts.