Is Fiat Flirting with Suzuki as a Response to the VW Group Wanting to Buy Alfa Romeo?

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VW’s Chairman Ferdinand Piech and Fiat-Chrysler CEO Sergio Marchionne, two of the European automotive industry’s most prominent executives, have presumably read Sun Tzu’s Art of War and are aware of this excerpt:

“Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.”

The two groups are currently involved, if not in war, then certainly in a peculiar game of strategy and tactics – and there is no way of knowing who will come up trumps.

In a recent interview with Japanese business daily newspaper Nikkei, Marchionne commented that he wants to strengthen the ties between Fiat and Suzuki and will do “whatever possible” to make that happen.

Initially, the Italian company’s only joint venture with the Japanese brand concerned the rebadging of the latter’s SX4 small crossover as the Fiat Sedici. Then the two parties decided to sign a deal, in which Fiat would supply Suzuki with its diesel engines. This is the point where things get interesting.

Since December 2009, VW owns a 19.9 percent stake in Suzuki as part of what, at the time, was termed a “strategic cooperation”. When the Germans learned of the diesel engine deal, they accused their “partner” of violating their own agreement and gave it “a period of several weeks to remedy the infringement”.

The Japanese carmaker’s CEO Osamu Suzuki responded that the two companies “aren’t even talking”. He demanded a formal apology and subsequently announced that the agreement has been terminated and threatened to take the case to an international court for arbitration if VW continued to hold on to its stake.

Meanwhile Piech made no secret of his desire to acquire Alfa Romeo from the Fiat group. Marchionne repeatedly declined the offer, insisting that Alfa was not for sale. Forming an alliance with Suzuki could very well be Marchionne serving Piech a cold dinner…

By Andrew Tsaousis

Story References: Autonews Europe

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