Suzuki, General Motors to end Canada partnership

TOKYO: General Motors Co. and Suzuki Motor Corp. have agreed to end their joint venture in Canada, leaving GM without a Japanese automaking partner after also severing manufacturing links with Toyota.

Suzuki said on Friday it will sell its 50 per cent stake in CAMI Automotive Inc. to GM for an undisclosed price. The deal marks the demise of a nearly three-decade relationship between the two companies and gives GM full control of the factory.

GM ended its Fremont, California joint venture with Toyota Motor Corp., the world's No. 1 automaker, earlier this year.

CAMI, based in Ingersoll, Ontario, was established in 1986 to provide GM an opportunity to offer economy cars and to give Suzuki access to the North American market.

It launched production in 1989 and has built more than 2.3 million vehicles so far, including the Chevy Metro, Suzuki Swift and Pontiac Firefly. It began making midsize sport-utility vehicles in 2004.

GM has high hopes for the plant as it works to return to profitability under government-led rehabilitation. It is expanding production at the plant amid brisk sales of the Chevrolet Equinox and GMC Terrain, two crossover models that posted 17 per cent higher sales in November.

``Bringing CAMI completely into the GM family is a strong vote of confidence in the people there and builds on the recent positive news at the plant since the highly successful launch of the Chevrolet Equinox and GMC Terrain,'' GM Canada President Arturo Elias said in a statement.

A cash-strapped GM sold its remaining 3 per cent stake in Suzuki last year in the wake of the global financial crisis. The two companies' affiliation extends back to 1981, but those ties loosened after GM sold a 17 per cent stake in Suzuki in 2006.

Suzuki spokesman Hideki Taguchi said GM approached the Japanese automaker with an offer to buy it out of CAMI.

The deal makes sense for Suzuki, he said. The Canadian plant no longer makes Suzuki-brand vehicles after halting the XL7 in June due to lackluster demand. The automaker now exports vehicles sold in North American from Japan.

Suzuki's market share in the US is tiny. It sold just 1,540 vehicles in November. In contrast, Toyota sold 133,700 vehicles, and Honda Motor Co. sold 74,003 units.