Suzuki, Fiat plan SUV venture
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Suzuki CEO Osamu Suzuki joined Hungary's Prime Minister Peter Medgyessy at the Ignis launch.
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Tokyo, Japan (CNN) -- Japan's Suzuki Motor and Italy's Fiat are joining forces to make a small sports utility vehicle (SUV), the carmakers said Friday.
Suzuki and Fiat both have links to the world's biggest maker, General Motors of the United States. GM has a 20 percent stake in each.
The four-wheel-drive SUV will be based on Suzuki's subcompact Ignis passenger car, which began production at its Esztergom plant in Hungary on Thursday. Suzuki CEO Osamu Suzuki joined Hungarian Prime Minister Peter Medgyessy at the Ignis launch.
The new model will have a 1.5 liter engine and will be built in Hungary from the second half of 2005.
Suzuki said the two companies planned to sell a total of 60,000 units in Europe annually, split 40,000 to Suzuki and 20,000 to Fiat. The cars will be the same mechanically, but will be sold separately under the Suzuki and Fiat brands.
Both petrol and diesel models will be offered, with Fiat providing the diesel engines.
According to the Nihon Keizai business daily, Suzuki's goal from the tieup is to cut its development costs and reinforce its foothold in the highly competitive European subcompact market.
The newspaper said Fiat wanted to strengthen its operations and better compete in a market segment in which it has traditionally been weak.
Shares in Suzuki closed Friday at 1399 yen, down 1.76 percent. That compares with a fall of 2.05 percent for the Nikkei 225 average and 1.28 percent for the broader Topix index.
