Suzuki sends Volkswagen notice of agreement 'breach'

14th October 2011, Comments 0 comments

Japanese automaker Suzuki said Friday it sent Germany's Volkswagen a "notice of breach" of agreement, claiming that it has not been given access to technologies promised under their 2009 alliance.

Suzuki sent the notice to Volkswagen, demanding that if it does not gain access to hybrid and environmental technologies, the German auto giant must sell back its stake and quit the alliance.

"The notice requires that VW remedies numerous breaches of the companies' Framework Agreement," the statement said.

The Japanese automaker in September said it wanted to end its ill-fated two-year alliance with Volkswagen following disagreements between the pair on how to operate together.

They formed a tie-up in 2009 under which Suzuki expected to beef up its development of green technology.

Chairman and CEO Osamu Suzuki said in a statement: "This capital alliance was intended to facilitate Suzuki's access to VWs core technologies. I remain disappointed that we have not received what we were promised."

"If Volkswagen will not allow access it must return Suzukis shares," Suzuki said.

Volkswagen currently holds 19.9 percent of Suzuki's outstanding shares.

Suzuki is seeking a reply from Volkswagen within two weeks, according to spokesman Hideki Taguchi, adding that the firm hopes to reach an amicable settlement.

Ahead of Suzuki's move last month towards ending the tie-up, relations had become frayed as Volkswagen served notice of an alleged infringement relating to the supply of diesel engines to Suzuki from Italian carmaker Fiat.

© 2011 AFP

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