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Suzuki seeks new venture in China

Suzuki, Japan’s fourth largest auto giant, has been in talks with numerous Chinese firms for the settlement of a new joint venture, chairman and general manager of Suzuki Motors (China) Investment Co. said recently.

It is the first time an official from Suzuki admits the company’s intention. In March this year, Suzuki China relocated its 15-year-old office in Beijing to Shanghai. An insider said that the Japanese firm may cooperate with China’s largest auto maker, Shanghai Automotive Industry Corporation (SAIC), but SAIC denied.

Suzuki’s decision was objected by its Chinese partner Chang’an Auto, since the latter regards the plan as ‘rebellious’. In 1993, the two established the joint venture Changan Suzuki.

Though Suzuki has been present in the Chinese market for over 17 years, compared with Honda, Toyota and Nissan, Suzuki’s total sales in China, including the two brands Changan Suzuki and Changhe Suzuki, performed poorly and sold no more than 250,000 units in 2009, according to media reports.

Therefore, setting up a new joint venture is easier for Suzuki to break the bottleneck on sales than to improve Changan Suzuki and Changhe Suzuki’s performance, an analyst said.

Changan Auto showed dissatisfaction hoping the firm would make efforts to ameliorate its existing sub-brands instead of initiating a new one.

Rules in China disauthorize any firm to set up more than two JVs.

Although Changan Auto purchased Changhe Suzuki in 2009, the first stated that it does not plan on any integration of the brands. Suzuki, on the other hand has been suggesting Changan Auto to combine the two, therefore allowing Suzuki to set up the new venture, which entirely depends on whether Changan Suzuki and Changhe Suzuki merger.

Source: Global Times

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