Volkswagen VW Suzuki

Volkswagen Suzuki divorce – lessons for partnership strategies in Japan

“Mr Suzuki didn’t want to be a VW employee” (Prof. Dudenhoeffer via Bloomberg)

Partnerships in Japan without meeting of minds, trust, and communication don’t work

by Gerhard Fasol, All Rights Reserved. 18 September 2015

On 9 December 2009, Volkswagen-CEO Mr Martin Winterkorn and Suzuki-CEO Mr Osamu Suzuki at a press conference in Tokyo announced a “comprehensive partnership”.

A Reuters photograph shows a beaming and smiling Mr Winterkorn, while Mr Suzuki looks the other way, avoiding Mr Winterkorn’s eyes. Mr Winterkorn and Mr Suzuki don’t seem to have any language in common, therefore can’t talk to each other. Wall Street Journal writes that details of their “comprehensive partnership” will be negotiated later, in weeks or in months. Looking back it is obvious that these negotiations never were successful.

The Volkswagen-Suzuki partnership soon lead to publicly discussed disputes between both partners, culminating in Osamu Suzuki” blog post “Suzuki and Wagen now and the way forward” (スズキとワーゲンの今とこれから) which sealed the fate of the partnership in the most public way possible.

Professor Ferdinand Dudenhoeffer, Director of the Center for Automotive Research at the University Duisburg-Essen according to Bloomberg, summarized: “Mr Suzuki didn’t want to be a Volkswagen employee, and that’s understandable”.

Read a detailed account and analysis of the Suzuki-Volkswagen partnership, its divorce, and the financial details here.

Lessons to learn from the Suzuki Volkswagen divorce: communication & respect

  • “Comprehensive partnership” without meeting of minds does not work
  • Partnerships are hard when CEOs on both sides don’t have any language in common, thus can’t talk to each other
  • Hidden agendas destroy trust
  • Without trust partnerships don’t work
  • Processes and methods (e.g. acquisitions of minor players all over Europe) successful in Europe often don’t work in Japan
  • Partnerships without respect both ways don’t work
  • Renault and Carlos Ghosn (at least before the 2018/2019 scandals), and Daimler with Mitsubishi-Fuso-Trucks show us how to build an Japanese-European car company alliance, Daimler (with Mitsubishi Motors) and Volkswagen (with Suzuki) show us how it does not work

Read our analysis in detail here: Suzuki Volkswagen “Wagen-san” divorce: how not to partner & lessons to learn.

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