Contract manufacturing for VW possible: Maruti

Maruti Suzuki India today said that a contract manufacturing deal with Volkswagen (VW) is possible under a global synergy programme between its parent, Suzuki Motor Corp, and the German auto major.

VW had last year picked up 19.9 per cent stake in Suzuki Motor Corp (SMC) for $2.5 billion, following which the partners have been exploring possibilities of joint production and vehicle design.

"There is a possibility of an original equipment manufacturing deal with VW, like the way we have with Nissan...Maybe.. But I don't know," Maruti Suzuki India Managing Director and CEO Shinzo Nakanishi said.

He said that officials of VW and SMC are currently in discussions for a roadmap on their global synergy programme.

In May this year, top officials of MSI and Volkswagen India had met to explore synergies in production and vehicle design.

The two companies are exploring synergies in areas such as product design -- not necessarily sharing models or joint model development -- and product testing, evaluation or part-designing of future models and special projects.

While Suzuki is keen on getting VW's technology, the German firm is interested in Maruti Suzuki's expertise in high volume production at a very competitive cost and efficiency.

In July, VW management board member Christian Klinger had admitted that there was a "possibility of developing products together" with MSI, although he did not confirm it.

At present, MSI supplies the A-Star, which is sold as Pixo by Nissan in Europe under a contract manufacturing agreement till 2013.

Nissan Motor Co Executive Vice-President Collin Dodge had said in March this year that the company would continue to source from Maruti Suzuki, despite VW's stake purchase in SMC.

"We have a contract (with Suzuki) for Pixo supply to Nissan in Europe with a committed volume and committed transfer price till 2013. That's legal, that stands," he had said at the Geneva Motor Show.