After the Breakup: The Troubled Alliance between Volkswagen and Suzuki
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Case Code: BSTR412 Case Length: 16 Pages Period: 2008-2012 Pub Date: 2012 Teaching Note: Not Available |
Price: Rs.500 Organization: Volkswagen AG, Suzuki Motor Corporation Industry: Automotive Countries: Global; Europe; Asia Themes: Growth Strategy, Strategic Alliance, Implementation |
Abstract Case Intro 1 Case Intro 2 Excerpts
About Suzuki
Headquartered in Hamamatsu, Shizuoka, Japan, Suzuki Motor Corporation specialized in manufacturing compact automobiles, motorcycles, all-terrain vehicles (ATVs), outboard marine engines, wheelchairs, and a variety of other small internal combustion engines. As of 2011, the company was the 9th largest automobile manufacturer in the world and the 4th largest in Japan after Toyota Motor Corporation , Nissan Motor Company Ltd., and Honda Motor Company Ltd. The company produced 2,878,000 automobiles and 2,735,000 motorcycles during 2010-2011 earning revenue of ¥9 2.6 trillion and making a profit of ¥45.17 billion during FY2011.
Michio Suzuki founded Suzuki Motor Corporation (Suzuki) in 1909 as Suzuki Loom Works in the village of Hamamatsu, Japan. The company built weaving looms for Japan's textile industry for 30 years and then diversified into manufacturing small cars. However, with the onset of the Second World War, the government declared civilian passenger cars as a 'non-essential commodity' and Suzuki stopped producing cars. After the war, Suzuki was back to producing looms. However, the cotton market collapsed in 1951 and Suzuki again took up the production of motor vehicles. During those times, the Japanese had a great need for affordable and reliable personal transportation. Banking on this need, many firms were producing 'clip-on' gas-powered engines that could be attached to a common bicycle, which could then be used as a motor vehicle.
Recognizing the need for motorcycles, Suzuki created its first two-wheeled motorized bicycle called the 'Power Free' in 1952. This innovation was considered ingenious and the patent office of the new democratic government of Japan granted Suzuki a financial subsidy to continue research in motorcycle engineering. In 1954, the company officially changed its name to Suzuki Motor Co., Ltd. and was producing 6,000 motorcycles per month...
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