After trust issues doomed Suzuki Motor Corp.'s alliance with Volkswagen AG, the Japanese carmaker now has to win over shareholders skeptical of plans for its crucial partnership with India's largest carmaker.
Suzuki wants to set up a wholly owned factory in India and supply cars and components to its 56 percent-owned unit Maruti Suzuki India Ltd. It will have to win over Maruti minority shareholders concerned that plans to have Suzuki focus on production and Maruti concentrate on sales and distribution will sideline the Indian unit.
By investing directly in more production capacity for India, Suzuki is seeking to become a bigger player in its largest market while freeing up Maruti to expand its sales network and build a new premium brand. To pull this off, Suzuki has to build trust after failing to do so with Volkswagen in an alliance originally aimed at expanding their presence in India. The two companies parted ways after a four-year-long dispute ended in September.