Frankfurt: Volkswagen could be interested in a tie-up with Japanese carmaker Suzuki Motor Corp, Chief Executive Martin Winterkorn told a German magazine.

"Suzuki would be an interesting partner because of its competency in small cars," he said in an interview with Manager Magazin released ahead of publication today.

Volkswagen, Europe's biggest carmaker, was not immediately available for comment, while Suzuki had no comment.

A person familiar with the matter said there had already been talks between VW and Suzuki.

The magazine said, without citing sources, that Volkswagen was interested in taking a 10 per cent stake in Suzuki or forming a joint venture. It said France's Renault was also in talks with Suzuki. Renault was not immediately available.

Suzuki Chief Executive Officer Osamu Suzuki had last told media in late June that he had had no contact with VW, shooting down a Manager Magazin report at the time that Europe's largest carmaker was exploring a deal with its Japanese rival to boost its presence in ultra small cars.

Shares of Volkswagen were down 3.4 per cent at 141 euros (Dh737.4) by 0934 GMT, while Renault was up 3.3 per cent at 32.50 euros. The DJ Stoxx European car sector index was up 1.5 per cent.

In the magazine interview, Winterkorn defended terms of VW's deal to buy an initial minority stake in Porsche's sports car business for up to 3.3 billion euros as a step toward a full merger of the carmakers.

"We are not giving away any money here," he said, adding several investment banks and auditors had confirmed it was paying a fair price in the deal.

The transaction is set to make Porsche the 10th brand in Volkswagen's camp, which ranges from small cars to heavy trucks.

Winterkorn said he could imagine Porsche's annual vehicle sales doubling to around 150,000 units "in the foreseeable future, say 2012 or 2013" as it adds more models.

These could include a new model smaller than the Boxster, its smallest car so far; a "little brother" to the Cayenne sport utility vehicle and an additional version of the new Panamera four-door sedan, he said.