German car giant Volkswagen will take a nearly 20 percent stake in Japan’s Suzuki for more than 2.5 billion dollars, giving VW a solid footprint in the Indian automarket, the companies said Wednesday.
Europe’s biggest carmaker, which hopes to unseat world leader Toyota, already has a strong presence in China but wants to expand its Asian reach in an alliance with the Japanese compact car maker.
Suzuki said the 19.9-percent stake is worth about 222.5 billion yen (2.53 billion dollars, 1.72 billion euros) and that it “intends to invest up to one half of the amount received from Volkswagen into shares of Volkswagen.”
The deal, set for January, comes as the recession-battered auto industry restructures, with new alliances forming to share green technology and small car designs while extending their global reach through combined sales networks.
PSA Peugeot Citroen of France has been in talks for a stake in Mitsubishi, and the partners Renault and Nissan said last month they would launch “an ultra low-cost car” in India in 2012 to take on Tata’s Nano.
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