Do refer to our earlier post for a quick recap of how it all started.
Suzuki has filed for arbitration in the International Court against VW. Suzuki wants its shares held by VW (as part of the earlier agreement) to be returned, while VW is not interested in giving up a 20% stake in the competitor that easily.
While the details of the arbitration process do not concern us, our takeaway is that the back-door talks have failed. The co-operation agreement between VW and Suzuki has been effectively shelved.
Although a discussion on potential implications on Suzuki is out of our scope, the implication on our market is that nothing changes at Maruti Suzuki. Maruti will now continue to source diesel engine technology from Fiat Powertrain and we will continue to enjoy powerful yet frugal diesels from Maruti.
It is also likely that Maruti will license Fiat's new award-winning Multi-Air engines. These are petrol engines (developed primarily for Europe) that dynamically control combustion in each stroke within each cylinder of the engine. The end result is increased fuel-efficiency and lower CO2 emissions. A small displacement and fuel-efficient petrol engine sounds ideal for our market.
Apart from that, VW will now have to work alone and hard at cracking the Indian market using their VW and Skoda brands. They surely have their work cut out.
Suzuki has filed for arbitration in the International Court against VW. Suzuki wants its shares held by VW (as part of the earlier agreement) to be returned, while VW is not interested in giving up a 20% stake in the competitor that easily.
While the details of the arbitration process do not concern us, our takeaway is that the back-door talks have failed. The co-operation agreement between VW and Suzuki has been effectively shelved.
It is also likely that Maruti will license Fiat's new award-winning Multi-Air engines. These are petrol engines (developed primarily for Europe) that dynamically control combustion in each stroke within each cylinder of the engine. The end result is increased fuel-efficiency and lower CO2 emissions. A small displacement and fuel-efficient petrol engine sounds ideal for our market.
Apart from that, VW will now have to work alone and hard at cracking the Indian market using their VW and Skoda brands. They surely have their work cut out.
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