VW CEO tells magazine that Suzuki would be an ‘interesting partner’

FRANKFURT (Reuters) — Volkswagen AG is open to the idea of a tie-up with Japanese carmaker Suzuki Motor Corp., CEO Martin Winterkorn told a German magazine.
“Suzuki would be an interesting partner because of its competency in small cars,” he said in an interview with Manager Magazin, due to be published on Friday.

Volkswagen was not immediately available for comment, while Suzuki had no comment.

A person familiar with the matter said there had already been talks between VW and Suzuki.

The magazine said, without citing sources, that Volkswagen was interested in taking a 10 percent stake in Suzuki or forming a joint venture. It said France’s Renault SA was also in talks with Suzuki. Renault was not immediately available for comment.

Suzuki’s CEO Osamu Suzuki had told media in late June that he had had no contact with VW, shooting down a Manager Magazin report at the time that Europe’s largest carmaker was exploring a deal with its Japanese rival to boost its presence in ultra small cars.
VW CEO tells magazine that Suzuki would be an ‘interesting partner’

Shares of Volkswagen were down 3.4 percent at 141 euros by 1034 CET, while Renault was up 3.3 percent at 32.50 euros. The DJ Stoxx European car sector index was up 1.5 percent.

Defending Porsche deal

In the magazine interview, Winterkorn defended terms of VW’s deal to buy an initial minority stake in Porsche Automobil Holding SE’s sports car business, Porsche AG, for up to 3.3 billion euros ($4.65 billion) as a step toward a full merger of the carmakers.

“We are not giving away any money here,” he said, adding several investment banks and auditors had confirmed it was paying a fair price in the deal.

The transaction is set to make Porsche the 10th brand in Volkswagen‘s camp, which ranges from small cars to heavy trucks.

Winterkorn said he could imagine Porsche’s annual vehicle sales doubling to about 150,000 units “in the foreseeable future, say 2012 or 2013″ as it adds more models.

These could include a new model smaller than the Boxster, its smallest car so far; a “little brother” to the Cayenne premium SUV and an additional version of the new Panamera four-door sedan, he said.

Earlier this week, Porsche AG CEO Michael Macht said that the 150,000-unit target is reachable if the automaker adds a fifth model line.
VW CEO tells magazine that Suzuki would be an ‘interesting partner’

VW Mexico plant, maker of U.S. Jettas, shut by strike

PUEBLA, Mexico (Reuters) — Workers at Volkswagen AG’s Mexican plant went on strike today after wage negotiations between the company and the plant’s union broke down.
Workers shouting slogans hung red and black strike banners at the entrances to the factory in the central state of Puebla, which makes Jettas and New Beetles for the U.S. market.

The strike apparently won’t have an immediate impact on U.S. operations. The VW brand had a 108-day supply of cars on August 1, more than double the U.S. industry average. Sales of VW-badged vehicles dropped just 13.5 percent this year through July in a market that has fallen 32.1 percent.

Like the rest of Mexico’s auto industry, VW‘s Mexican plant has been hit hard by the U.S. recession. Mexico’s auto output fell 25 percent in July from a year earlier.

Mexico’s plummeting auto exports have been a leading factor in the country’s recession, with the economy this year expected to contract more than any time since 1932.
VW Mexico plant, maker of U.S. Jettas, shut by strike

Volkswagen builds 1,500 cars a day at the plant for both the Mexican market and for export.

A VW spokesman in Germany said the company did not expect a significant impact from the strike as contract negotiations were scheduled to resume Thursday.

Workers are seeking a 3 percent wage increase, union leader Victor Cervantes told Reuters as he left the labor ministry in the capital, where wage negotiations were taking place.

Volkswagen said in a statement that it had offered a 1 percent increase in wages starting in February 2010, as well as a 5,500 peso ($425) cash bonus.

“It was not possible to reach a deal,” Volkswagen said.
VW Mexico plant, maker of U.S. Jettas, shut by strike