VW Eyes #1

“Germany’s Volkswagen will buy a one-fifth stake in Suzuki Motor for $2.5 billion, giving it access to the Japanese firm’s expertise in small cars and dominance in India as it seeks to become the world’s top automaker. With the global car industry facing still fragile demand, chronic overcapacity and stricter environmental regulations, pressure has grown on automakers to join together to reduce costs and develop new technologies. Earlier this month, PSA Peugeot Citroen of France and Japan’s Mitsubishi Motors Corp said they were exploring deeper ties, which have so far been limited to a project-based partnership. ‘This comes right after the Mitsubishi deal and shows that foreign carmakers are coming to take stakes in Japanese firms, raising expectations of a reorganization in the autos sector,’ said Noritsugu Hirakawa, a strategist at Okasan Securities.”