After the Breakup: The Troubled Alliance between Volkswagen and Suzuki
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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
Suzuki served notice of breach of contract to VW in October 2011 stating that VW had not given it access to the hybrid technology which it had promised. Similarly, VW accused Suzuki of violating the agreement by procuring diesel engines from Fiat. Further fuelled by the cultural differences and failed joint business proposals, the partners, on November 18, 2011, terminated the framework agreement and Suzuki demanded that VW return its 19.9% shareholding in the company. VW's refusal to do so led to Suzuki filing for international arbitration. This case is meant for MBA students as a part of the International Management/ Strategic Management course.
» Understand the various issues and challenges in strategic alliances.
Growth strategy; Strategic alliance; Global business model; Technology sharing; Trans-border alliance; transcontinental alliance; Culture; cultural differences; Japanese Business Etiquette; German Business Etiquette; International arbitration; International management; Implementation; Trust; Key success factors; Global automotive industry; Indian automotive market; Volkswagen; Suzuki; Germany; Japan; India
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