Business – A Kawazuki for 2005? –

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A Kawazuki for 2005 ?

After the agreement reached in August, the president of Kawasaki announced yesterday the very probable merger of its motorcycle activities with those of Suzuki. A common motorcycle, bearing the name of the future third brand, could even see the light of day within 3 years.

Mr. Masamato Takazi, chairman of Kawasaki Heavy Industries, told Bloomberg News Agency yesterday that he was "very likely that Kawasaki and Suzuki will merge their motorcycle activities".

Information not confirmed by Suzuki, but the stated goal of which is to strengthen the two groups against the two leading world manufacturers, Honda and Yamaha. At the end of August, Kawasaki and Suzuki had already signed a cooperation agreement in Tokyo on "product development and purchasing and manufacturing policy, so as to improve the competitiveness and profitability of their activity"(see, Moto-Net of August 30, 2001).

Mr. Takazi’s statements now constitute an additional step in this merger process, since a subsidiary common to both groups could produce its first motorcycle within three years: "it will not be a Kawasaki, nor a Suzuki, but a third brand"said Mr. Takazi …"Suzuki could separate its motorcycle division from its automotive business, he explained , and we could do the same because the motorcycle is only one component of our businessSuzuki, 20% owned by US auto giant General Motors, has not officially confirmed this possibility, but group spokesman Takeaki Nukii said.the managers of the two companies are in regular contact. Our projects to build a common motorcycle, initiated in August, are progressing"he simply added.

On the Tokyo Stock Exchange, Kawasaki stock hit its highest rate in the last two weeks at 120 yen (+ 4.4%) according to Bloomberg, while Suzuki stock gained 6.6%, its highest increase in two months. According to Steve Usher, analyst at JP Morgan Securities Asia, "this statement is good news for Suzuki. The merger will increase profits and reduce the number of models", he said, adding that"this agreement would allow Suzuki to strengthen its position on large engines".

Good news for investors, who may not, however, have the same echo among bikers due to the standardization of models … A few days before the decision on the future of Voxan, Mr. Takazi could not- he not plan a business lunch with Jacques Gardette ?

Eric MICHEL

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