As a result of the morning chatter, Suzuki's shares went up 5.5 percent at 2,195 yen (about $23) after rising as much as 7.7 percent to a 10-month high, Autonews reported. On the other hand, Volkswagen's shares dropped in the morning by 3.7 percent, but managed to get back on track, increasing by 11 percent after rumors saying the group is closer to a deal with Qatar began surfacing.
Analysts, on the other hand, say a deal with Suzuki may be a good step made by Volkswagen. "Volkswagen could benefit from an alliance by increasing its product lineup in the ultra-small car segment... Suzuki could benefit from VW's know-how regarding diesel engines," Marc-Rene Tonn, MM Warburg analyst told the source.
The Volkswagen source who this morning started the rumor told Reuters pretty much the same thing. Suzuki would give VW access to ultra-small car technologies, while the no. 4 Japanese manufacturer would take inspiration from VW's expertise.
"You have see it through an Asian perspective, particularly a Japanese one. There are vehicle sizes and classes that cannot be found here," the source said this morning. "It is undoubtedly an interesting segment, just have a quick look at the developing markets like India. It's correct that there is a gap there that could be closed."
Suzuki is already involved in joint ventures with several other car manufacturers, including Opel and Fiat. Osamu Suzuki, company's CEO, repeatedly said any other cooperation proposal is welcomed for his company, especially if they bring along hybrid or fuel-saving know how.
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