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VW May Join Suzuki on Thailand Eco-Car Project

By Motortrend India Staff   |   12 April,2010

Volkswagen Group, which acquired a 19.9 percent stake in Suzuki at the end of last year, is likely to collaborate with Suzuki on a number of international projects.

VW is also in talks with its strategic partner, Suzuki Motor, to share production at its car plant in Thailand. This news comes from sources at the Thai government’s Board of Investment (BOI), the body that approves foreign investment in the country.

Last year, Volkswagen acquired a 19.9 percent stake in Suzuki, while Suzuki used half of the proceeds to purchase Volkswagen share. The two companies would collaborate on a number of projects to help improve economies of scale.

Most of the joint endeavours are likely to be in emerging markets, where Suzuki has a low-cost production base. Suzuki would be looking at getting the Volkswagen diesel technology.

Suzuki is investing $235 million on a new plant in Thailand with annual production capacity of 120,000 units. The facility will manufacture small 1.3-liter car that will, under the Thai government’s eco-car program, get important tax incentives.

The car must comply with Euro IV emission standards and have a fuel efficiency that is the equivalent of 47 mpg.

So far, Volkswagen’s involvement in the ASEAN region has been minimal and almost completely dependent on imports. Joining hands with Suzuki’s projects would definitely bring opportunities for VW.

The two companies are likely to join hands in the small car segment in India too.

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