City & Corporate: Suzuki calls in Bell Pottinger

Japanese auto manufacturer brings in PR support to fight legal case with Volkswagen.

Japanese auto giant Suzuki has drafted in Bell Pottinger to help fight its corner in a high profile dispute with German carmaker Volkswagen.

Suzuki took legal action against Volkswagen last month, accusing VW of breaching the terms of a co-operation agreement the companies signed in December 2009.

Under the terms of the agreement, the firms would share technology and take a stake in each other. VW took a 19.9 per cent share of Suzuki, while the Japanese company took a 1.5 per cent stake in its bigger contemporary.

Suzuki now claims that VW has breached the terms of the agreement, saying it has been unable to gain access to the German firm's technology.

Suzuki wants to dissolve the partnership and take back the stake VW owns, while VW wants to keep its shareholding and disputes Suzuki's claims.

The Japanese firm has engaged Bell Pottinger to support its comms strategy and media relations around the dispute.

The Bell Pottinger team is drawn from across the group, led by group MD David Beck, with support from Pelham Bell Pottinger. The agency was taken on without a competitive pitch and is believed to have been recommended by one of Suzuki's corporate and legal advisers.

One development that is understood to have particularly angered Suzuki was that VW had begun describing the Japanese auto firm as an 'associate'. In VW's annual report in March, the company stated that it had the ability to 'significantly influence financial and operating policy decisions' at Suzuki.

Suzuki claims that being an 'associate' was explicitly agreed against in the 2009 agreement.

Last week, VW released an annual report that changed Suzuki from being listed as an 'associate' to being included in its 'other holdings' list.

While this is a victory for Suzuki's public campaign, it is understood that the firm is determined to press ahead with its efforts to buy back the stake VW still holds.

Talking about the dispute, chief executive Osamu Suzuki said: 'Our basic stance is that we want a peaceful resolution. But we don't want to let this drag on and on.'

Declining to put a timescale on a resolution, he added: 'We have no idea what is going on because Volkswagen has not communicated directly with us.'

VW insists it has provided 'intensive technical support'.

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