Volkswagen, Suzuki resume alliance talks - sources

FRANKFURT (Reuters) - Volkswagen and Suzuki Motor Corp have resumed talks about how to resolve a dispute about a partnership deal, two sources familiar with the matter said on Monday.

"There have been talks at board level," one of the people familiar with the matter told Reuters, a sign that the frosty relations between the two car makers may be thawing.

Both car makers had attempted to form an alliance two years ago but talks stalled over disagreements.

Both car makers now see potential from continued cooperation, but whether the dispute can be fully resolved remains to be seen, the person further said.

Volkswagen and Suzuki declined to comment.

VW paid 1.7 billion euros for a 20 percent stake in Suzuki in January 2009, in a deal that was supposed to give VW a strong foothold in the growing Indian market and Suzuki access to fuel-saving technologies.

The alliance morphed into bitter mud-slinging in September 2011, when VW said Suzuki had broken their contract by deciding to procure diesel engines from Fiat.

Suzuki for its part asked to buy back its stake, but Volkswagen refused, leading both auto makers to head for an arbitration process.

(Reporting by Jan Schwartz; Writing by Edward Taylor; Editing by Marilyn Gerlach)