Volkswagen and Suzuki have been at odds since VW said in its annual report published in March that it could "significantly influence financial and operating policy decisions" at Suzuki, describing the Japanese company as an "associate."
Osamu Suzuki, the Japanese carmaker's chairman, said in an interview on Aug. 10 that the company "sees no reason why Volkswagen would be upset" about Suzuki expanding its purchase of engines from Fiat.
Suzuki formed an alliance with Fiat to make diesel engines in Asia in 2005. In June this year, it expanded the agreement to buy engines from Fiat in Hungary.
The public feud has brought to a halt VW's efforts to form an operational alliance. The partnership was meant to combine Suzuki's leading position in India, Asia's second-fastest growing major economy, with Volkswagen's global reach as the world's third-biggest carmaker.
When the VW-Suzuki deal was signed in December 2009, the companies said they intended to cooperate on technology, including hybrids and electric cars, and expansion in emerging markets. Almost two years later, no joint projects have begun.
VW, which forecasts deliveries will rise 5 percent this year after selling 7.2 million vehicles in 2010, aims to surpass Toyota Motor Corp. and General Motors Co. as the world's largest carmaker by 2018 and is targeting India as an expanding market to boost sales. Suzuki, which sold 2.64 million cars in its last fiscal year, delivered 1.13 million of those vehicles in India. VW sold 53,300 cars in the country in 2010.
Volkswagen still views Suzuki as "an attractive investment," Christine Ritz, VW's investor relations chief, said on Sunday.