US auto giant General Motors Corp. said Thursday it was tightening its grip on Japan's Suzuki Motor Corp. through a 600-million-dollar investment to boost their strategic alliance.
The world's biggest carmaker will double its controlling stake in Suzuki to 20 percent, a joint statement said, as Japan's once-mighty auto industry cedes further ground to US and European rivals.
But "Suzuki will remain fully independent," GM chairman John Smith told a news conference in Tokyo.
GM will buy new Suzuki shares for $600 million early next year and Smith will join the Suzuki board after its next annual shareholders' meeting in June, the statement said.
The agreement comes as GM expands its reach in Asia. It also controls Japanese truckmaker Isuzu Motors Ltd. and is taking a 20-percent stake in Fuji Heavy Industries Ltd., maker of Subaru four-wheel-drive vehicles.
"This strengthened alliance with Suzuki is a critical part of our growth strategy in this region," the GM chairman said.
"We will expand our cooperation in areas such as R and D (research and development), purchasing, finance and information systems to further leverage resources."
The announcement came on the second anniversary of GM's initial 10-percent investment in Suzuki, Japan's biggest maker of minicars with engine capacity of 600cc or less, and its third-biggest motorcycle maker.
"The two companies have grown much closer together and we feel very good about what we have accomplished, and we can do more," Smith said.
The GM chief would give "strategic advice" to the Suzuki board, on areas such as R and D, technology and environmental issues, the Japanese firm's chairman Osamu Suzuki said.
"We would like to learn from the global perspective of General Motors," he told the news conference.
"The time is right to further enhance our strategic alliance," he added.
Suzuki's share price jumped 100 yen (9.4 percent) to 1,160 yen ($11) on the Tokyo Stock Exchange Thursday morning.
"Investors took heart from the expanded alliance, which showed GM's commitment to Suzuki," said Hiroichi Nishi, deputy general manager of Nikko Securities.
One fruit of the alliance will be the start of production next September of the jointly developed YGM-1 passenger car, first unveiled last October at the Tokyo Motor Show.
The YGM-1, to be built at Suzuki's biggest plant in Kosai in central Japan, will use a Suzuki chassis platform and engine but carry GM's Chevrolet brand.
"We are absolutely thrilled that GM will be able to build this jointly developed vehicle at Suzuki's mother plant in Japan," said GM Asia-Pacific president Rudolph Schlais.
"It will be among the first of many jointly developed vehicles with Suzuki and our other alliance partners for the Asian region and is consistent with GM Asia-Pacific's strategy of sourcing Asian-derived vehicles for the region."
The car, a five-seater with a 1,300cc or 1,500cc engine, is targeted at Asian buyers in their early 30s. Other models on the same platform are also being considered, including a pick-up, sedan and four-by-four.— (AFP)
© Agence France Presse 2000
© 2000 Mena Report (www.menareport.com)
