HAMAMATSU- Suzuki Motor Corp is keen to take a stake in Volkswagen AG soon, as the European automaker looks for shareholders willing to sell to Suzuki, the head of the Japanese firm said on Friday.

Suzuki and Volkswagen last month announced a comprehensive tie-up, and Europe's top automaker on Friday became Suzuki's biggest shareholder with a 19.9 percent stake. Cross-shareholding between the two companies is part of the pact.

Volkswagen's floating shares are limited. We are having them look for potential sellers, Osamu Suzuki, the chairman and chief executive of Japan's fourth-largest automaker, said in an interview with a group of reporters.

He said Suzuki plans to procure diesel engines from Volkswagen, and the maker of Swift and Alto hatchback cars will review its ties with PSA Peugeot Citroen and Renault SA, which currently supply diesel engines to Suzuki.

As the global car industry faces fragile demand, chronic overcapacity and stricter environmental regulations, automakers are joining forces to save the billions each would need to develop state-of-the-art powertrains.

Suzuki is in a comprehensive alliance with Volkswagen. In every field including hybrid, diesel and electric cars, we will carry out joint development with them, or we will learn from them, Suzuki said.

The two automakers will aggressively look into the possibility of common parts and platforms, he said.

The chairman said last month the new partners agreed they want to develop a competitive small car, seen as key to taking the lead in developing countries.

Volkswagen is the No.1 carmaker in China, while Maruti Suzuki India, 54 percent-owned by Suzuki, commands half the Indian market.

Despite close ties in development and procurement, the two firms plan to keep their sales networks separate, Suzuki said.

We will not do things like Suzuki utilising Volkswagen's sales networks in China and South America or Volkswagen using Suzuki's sales channels in India, he said.

Suzuki, who turns 80 later this month, said he has no intention to quit as president.

Prior to his comments, Suzuki Motor shares closed down 1.4 percent at 2,206 yen, underperforming the Nikkei average .N225, which gained 0.7 percent.

(Writing by Kiyoshi Takenaka; Editing by David Dolan and Michael Watson)

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