Company representatives on both sides continue to deny the rumors, but talks between Volkswagen and Suzuki are continuing and the most recent report suggests Germany's largest automaker may buy as much as a 20 percent stake in Suzuki.
A source cited in a Reuters report says a deal is close and could be announced as early as this week. There is even speculation that VW could eventually take a controlling share of the Japanese automaker. Currently a 20 percent share would be worth roughly $2.8 billion.
VW is interested in Suzuki because of its expertise in mini cars as well as its market penetration in India. Suzuki, Japan's fourth largest automaker, is actually its largest when all 660cc-powered vehicles are included. (Which they aren't traditionally). Suzuki, while having denied any such sale, is in need of an international partner after its relationship with General Motors fell apart recently. As a partner, GM provided the Japanese automaker with platforms for larger vehicles.
Volkswagen has also expressed a desire to become the world's largest automaker by 2018 (currently it is ranked 3rd). A majority stake in Suzuki would almost certainly guarantee that. The addition of Suzuki (if VW were able to gain a controlling share), would expand Volkswagen's brand portfolio to 11 names, includes the likes of Audi, Porsche, Lamborghini and Bentley.
More: Report: Volkswagen to Buy 20 Percent Stake in Suzuki on AutoGuide.com