Dec 9 (Reuters) - Germany’s Volkswagen (VOWG.DE) will buy a 19.9 percent stake in Japan’s Suzuki Motor (7269.T) for $2.5 billion, the companies said on Wednesday, the latest in a series of tie-ups between global automakers. [ID:nTOE5B8012]
News of the deal between Volkswagen and Suzuki comes days after PSA Peugeot Citroen (PEUP.PA) and Mitsubishi Motors Corp (7211.T) said they were exploring deepening their relationship, which is limited to a project-based partnership so far.
Tie-ups between automakers in the East and West are being advanced as a survival strategy for the industry to cope with fragile demand, chronic overcapacity and stricter environmental regulations, though few have yet reached completion.
For a TIMELINE on the global auto industry’s struggles since the financial crisis hit see [ID:nL228426]
Here is a snapshot charting some of East-West deals under discussion this year.
* June 3, 2009 - Little-known heavy machinery maker Sichuan Tengzhong Heavy Industrial Machinery unveils tentative deal to buy GM’s Hummer. [ID:nN02495245]
* Oct 9 - GM signs deal to sell Hummer to an investment partnership headed by China’s Tengzhong.
* Oct 12 - Tengzhong seeks regulatory approval for Hummer buy, aims to close purchase by early 2010. [ID:nHKG219405]
* Oct. 28 - Ford Motor (F.N) picks China’s Zhejiang Geely Holding Group as preferred bidder for its Volvo Cars unit.
* Dec. 1 - Geely is seeking at least $1 billion in loans from Chinese banks to finance its $1.8 billion bid for the Volvo unit, sources tell Reuters. [ID:nHKG130867]
CHINA’S BEIJING AUTOS AND THE U.S.’ GENERAL MOTORS
* Nov. 30 - Beijing Automotive Industry Holding Corp (BAIC) may still be interested in buying General Motors’ Saab unit, according to the Chinese car company’s general manager. [ID:nPEK20085]
— For a TIMELINE tracing China’s carmakers’ links with global brands see [ID:nSP357901]
FRANCE’S PEUGEOT AND JAPAN’S MITSUBISHI MOTORS
* Dec. 3 - French carmaker PSA Peugeot Citroen and Japanese peer Mitsubishi Motors Corp say they are in talks to strengthen an existing relationship, which would create a leader in electric vehicles. Mitsubishi, whose shares rise 13.4 percent, says a capital tie-up is possible. [ID:nBNG460701]
* Dec. 4 - The head of Mitsubishi Motors backtracks, saying the Japanese automaker is not discussing any numbers on the possible acquisition of a stake by Peugeot [ID:nT210831]
* Dec. 8 - Volkswagen plans to take a stake of up to 20 percent in Suzuki, providing Suzuki with a much-needed development partner and giving VW access to better small car technology, sources tell Reuters. [ID:nTOE5B709O]
* Dec. 9 - Suzuki and Volkswagen confirm a deal for the German automaker to buy 20 percent of its Japanese peer and for Suzuki to take a stake in Volkswagen.
— The deal will benefit Suzuki by giving it cash and a partner to develop clean-car technology it lags, while giving Volkswagen a minicar platform, as well as a foothold in emerging markets, particularly India. Source: Reuters (Compiled by Gillian Murdoch; Editing by Lincoln Feast)