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After a two year alliance between Volkswagen and Suzuki, relations and communication quickly deteriorated earlier this September after Suzuki had gone to Fiat to supply their engines. Volkswagen, upset at the deal, very publically claimed it was a serious breach of Suzuki's contract.

Now, Suzuki Chairman and CEO, Mr. Osamu Suzuki, is demanding Volkswagen to withdraw the claim, as it stains Suzuki's global reputation and public image. Osamu also insists that the deal with Fiat does not violate any contractual agreements with Volkswagen.

According to Suzuki, the matter of buying Fiat engines had been discussed with Volkswagen back in January and both sides accepted the terms. The reason behind the deal is Suzuki's need of an engine that would meet specified parameters for their Sx4 compact. Fiat had such a 1.6 liter diesel engine available while Volkswagen did not.

The unraveling relations have accelerated as a very upset Osamu Suzuki says, "Volkswagen's notice and press release hinder our effort to develop attractive new products and significantly disparage Suzuki's honor. I think you can share my view why Suzuki would like to dissolve partnership and cross-shareholding relationship with Volkswagen."

More: Suzuki Demands Volkswagen Withdraw Claim Of Breached Contract on
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