Chang'an objects to Suzuki's new JV attempt

By: Alfred Tian   2010-07-30

SHANGHAI - SAIC Motor, Volkswagen AG and Suzuki Motor are reported in talks to set up a three-way joint venture based on the existing Shanghai-Volkswagen, Beijing Times reported on July 25.

According to Chinese Automotive Industry Development Policy, a foreign automaker can set up no more than two joint ventures in China. Suzuki formed a JV, Chang'an-Suzuki, with Chang'an Auto in 1993. One year later, the Japanese small car manufacturer established another JV, Changhe-Suzuki, with Changhe Auto. After acquisition of Changhe-Suzuki, Chang'an Auto has become Suzuki's only partner in China, which may possibly give Suzuki an opportunity to work with a new Chinese automaker for vehicle production after Chang'an combines two Suzuki's JVs in China into one.

Facing the rumors that Suzuki may join Shanghai-Volkswagen, Chang'an Auto voiced its clear objection by saying that it will halt the plan of merging Chang'an-Suzuki and Changhe-Suzuki. This will leave nowhere for Suzuki to set up a new JV in China.

Shanghai-Volkswagen also denied the possibility of this three-way joint venture on July 26.