Tokyo: Suzuki Motors has filed for international arbitration in a bitter dispute with Volkswagen AG after the German automaker refused to sell back its 20% stake in the Japanese company.
Suzuki, a specialist in building small cars profitably for emerging markets, said on Thursday it initiated arbitration procedures with the International Chamber of Commerce International Court of Arbitration in London.
“We see no major financial impact based on the current share price, as VW has already booked a burden of €263 million ($351 million) in Q3/2011 as a result of the reclassification of its Suzuki stake in the balance sheet,” DZ Bank analyst Michael Punzet wrote in a research note.
Accusing its German partner of withholding hybrid technology it promised to share, Suzuki on 18 November declared its two-year alliance with the German company over and demanded a return of the 19.9% stake VW bought for about €1.7 billion in January 2009.
The German company reiterated its refusal that same day and Suzuki said it was prepared to go through an arbitration process that could take up to two years.
Volkswagen’s chief executive, Martin Winterkorn, said in an interview Monday with a German newspaper that he was patient and prepared to wait.
“We won’t sell our Suzuki stake. If the current management at Suzuki doesn’t want to work together with us, then maybe the next generation will,” the VW boss said.
A spokesman for the German carmaker reiterated the company would not give in to Suzuki’s demands.
“We’re very disappointed by this step that Suzuki is taking and cannot understand it in any way,” he said, adding there was no legal basis that could force VW to sell its shares.
VW has more problems than just Suzuki. At about 02:30 pm, the European Commission is expected to take Germany to court again over a law that protects state interest at Volkswagen.
Suzuki shares closed up 0.9% at 1,533 yen, compared with a 0.9% drop in the Tokyo exchange’s auto subindex. Volkswagen was up 1.2% at €113.95 at 02:09 pm.