New Delhi/Tokyo, Sept. 19: Volkswagen may make a move to take over Japan’s Suzuki Motor, German magazine Der Spiegel has reported, citing an unnamed senior manager at VW.

“I do not rule out this possibility,” the weekly quoted the person as saying on Sunday.

Volkswagen, which holds a 19.89 per cent stake in Suzuki, declined to comment on the matter. However, many feel Suzuki’s complex shareholding structure can thwart the German major’s attempt to take control of the Japanese car maker.

A series of Japanese banks and insurance firms hold 25 per cent in Suzuki Motor Corporation and together with Volkswagen, make up its top 10 investors. The remaining 55 per cent stake are held by just 52,000 shareholders, most of them Japanese institutions or individuals. The problem for VW is that these small stakes may not be up for sale.

“Japanese firms have a history of cross-holdings between them and they can act as a single entity in the rare case of an assault by a foreign multinational,” said Sanjeev Sinha, an Indian-Japanese Tokyo-based consultant, specialising in helping Japanese firms to invest in emerging markets.

After the Second World War, US officials who took over the Japanese economy imposed anti-monopoly rules to break up the power of traditional family controlled entities called Zaibatsus such as Mitsui, Mitsubishi and Sumitomo. Japanese businesses circumvented these rules by forming groupings with interlocking business relationships and shareholdings called Keiretsus.

Suzuki is an example of a Keiretsu, with cross-holdings from six Japanese banks and at least two Japanese insurance companies, including Japan Trustee Services Bank, The Master Trust Bank of Japan, Tokio Marine & Nichido Fire Insurance Co and The Bank of Tokyo-Mitsubishi Ltd. “An outsider can’t realise how much importance Japanese put on homogeneity of ownership. When I was discussing a fund for Japanese auto component manufacturers investing in India, Osamu Suzuki, who heads Suzuki, pointed out this will dilute ownership for the component makers,” Sinha, an alumnus of IIT Kanpur, with 15 years of experience in business consulting in Japan, said.

Though Japan has an open market economy, Japanese business culture has in the past been quite protectionist as far as investment is concerned. Very rarely has a Japanese firm been taken over by a global multinational. Despite US attempts to get a stronger foothold in Japan after the Second World War, the almost xenophobic policies of Japanese firms have blocked all attempts of acquisitions.

Rather, Japanese firms have successfully taken over several US and European firms. Even in India, Suzuki patiently negotiated with its partner, the Indian government, and eventually managed to get a controlling stake in Maruti Suzuki.

“Japanese firms believe in controlling its investments,” agreed Masanori Kondo, who teaches at Tokyo’s International Christian University, and advises Japanese firms in India.

The Nissan-Renault alliance is one of the few examples of a foreign penetration of a Japanese auto maker. The alliance has evolved over the years, with Renault holding 44.3 per cent of Nissan shares and Nissan holding 15 per cent in Renault. However, Nissan does not have a voting or board representation because of legal restrictions in France. “The deal was never popular with the Japanese who view Nissan as almost a foreign firm,” Sinha said.

According to Der Spiegel, “Volkswagen cannot raise its stake in Suzuki without the Japanese company's consent as long as the alliance between the two companies is still in place. But if Suzuki cancels the partnership, Volkswagen would be free to stock up.”

Last week, Suzuki decided to sever its alliance with Volkswagen. The partnership, forged in 2009, started deteriorating after Volkswagen accused Suzuki of violating the partnership agreement by concluding the engine supply deal with Fiat.

Maruti stock

News that Volkswagen is not averse to acquiring Suzuki fired up the Maruti stock on the stock exchanges today. The scrip rallied sharply on a day the Sensex fell over 188 points to 16745.35 due to European debt concerns.

On the BSE, the Maruti share rose over 3 per cent or Rs 34.15 to Rs 1,140.80.

Market circles said investors bought the stock on expectations that a hostile takeover of Suzuki by Volkwagen would benefit the Indian firm in many ways.