Suzuki to Reconsider Deals with Renault and PSA

After confirming that it will cut ties with General Motors in the hybrid development sector, Suzuki makes another step towards focusing exclusively on the recently-sealed deal with Volkswagen. This time, the Japanese manufacturer is looking into ways to cut ties with PSA Peugeot Citroen and Renault, both of which supplied diesel engines.

However, Suzuki is yet to make a decision on the matter but, given the fact that Volkswagen is planning to start several projects with the Japanese carmaker, this will most likely lead to the company shutting its doors to PSA and Renault.

At the same time, Volkswagen is also reviewing its Japanese marketing plans, as the Suzuki alliance brings new perspective and opportunities in the local factory. Volkswagen and Toyota will cut ties in 2010 and will most likely replace its local projects with new ones, supported by Suzuki, a move that would obviously cut costs.

One of the first cars to be developed and released by the VW - Suzuki alliance is a cheap Indian model that will cost between $4,300 and $5,400, Reuters informed quoting a report by the Economic Times. Production will be handled by Maruti Suzuki, with the model to replace the Alto, a very successful car in the local market.

"At some point we will need a replacement for the Alto. That price range is the entry level for Indian customers today, so we can't leave that segment open," R.C. Bhargava, chairman of the Indian manufacturer, said in a statement. "Volkswagen will be greatly interested in a car below the price segment of the Up ... and that is something we will need to check in our future together with Suzuki," Fabian Mannecke, a Volkswagen spokesman, added.