GM taps Japan's biggest maker of little cars - Reuters
By Edmund Klamann
TOKYO, Sept 16 (Reuters) - General Motors Corp ,
eager to bolster its line-up of inexpensive cars for
potentially high-growth emerging markets, on Wednesday
announced a global alliance with Japan's biggest minicar maker.
GM will become Suzuki Motor Corp's top
shareholder, raising its stake to 10 percent from 3.3 percent by
purchasing 42.27 billion yen worth of new shares.
"It's become clear that Eastern Europe, Latin America and
Asia-Pacific would provide growth where more mature markets would
not," GM chairman John Smith told a news conference.
"The developing world is clamouring for even more
affordable vehicles than we currently offer. Suzuki is the
leader in the small and mini sector of the market, and in many
places we needed to be, Suzuki was already there," he said.
The news comes less than a week after GM and Isuzu Motors Ltd
, another second-tier Japanese automaker owned 37.5 percent by
GM, said they would jointly build a $320 million plant in Ohio to
make diesel engines for GM pick-up trucks.
The two companies agreed last year that Isuzu would take over
development of diesel engines as part of a global reorganisation
of GM's powertrain operations.
Suzuki Motor president Osamu Suzuki said his deal with GM
grew out of talks during a trip to Detroit in May that, purely by
chance, coincided with the surprise announcement that Germany's
Daimler-Benz AG and Chrysler Corp planned to merge.
That merger helped spur a global consolidation in the
industry, including Toyota Motor Corp's decision last
month to buy out minicar affiliate Daihatsu Motor Corp
in a bid to beef up its small-car operations.
Suzuki and Daihatsu are Japan's two biggest makers of
minivehicles, a unique segment in the Japanese market featuring
small 660 cc engines and special tax breaks.
In stark contrast to Toyota's buyout of Daihatsu, however, GM
said it wanted Suzuki to remain independent and had no intention
of boosting its stake beyond 10 percent.
"It's independent and free-thinking and runs very fast and
lean," he said. "Why would anyone want to change that?"
Osamu Suzuki also appeared eager to continue driving his own
race. "Remaining independent will keep us on our toes," he said.
"If you end up depending on someone else, the game is over."
Smith said GM's first joint efforts with Suzuki were likely
to be small, inexpensive vehicles for emerging markets, such as
an urban personal transport car and a farm utility vehicle that
could also power water pumps and other agricultural equipment.
He added that, although Asia would take a few years to
begin growing again after the recent financial crisis and was
unlikely to regain the feverish pace of the past decade, it would
in the long term be a key region for growth in the automobile
industry.
For Suzuki, the deal will bring access to GM's larger cars to
help fill out its lineup in overseas markets. It will also bring
access to GM's new automotive technologies, which could be
crucial as stricter environmental standards and other changes
dramatically alter the look of cars in the future.
"Nobody thinks the gasoline engine is going to be around for
another 100 years," Suzuki said.
Suzuki and GM currently have a joint venture in Canada that
makes small cars like the Suzuki Sidekick and Chevrolet Tracker
sport-utility vehicles and the Chevrolet Metro. In May they
agreed to joint development of a new vehicle in the mini-car
segment, primarily for Europe.
((Tokyo Equities Desk +81 3 3432-9052
edmund.klamann@reuters.com)) |
