June 26 (Bloomberg) -- Suzuki Motor Corp., Japan’s fourth- largest automaker, gained the most in more than a month after Volkswagen AG was said to be considering a partnership, according to a person familiar with the situation.

Suzuki rose 5.5 percent to 2,195 yen, the most since May 7, at the 3 p.m. close on the Tokyo Stock Exchange, after jumping as much as 7.7 percent.

Volkswagen has made contact with the Japanese carmaker, a former affiliate of bankrupt General Motors Corp., on products and strategy, said the person, who asked not to be identified because the matter is confidential. There have been no talks on a stake purchase, the person familiar with the matter said.

“Suzuki needs a partner to help develop new models and GM has become very unstable,” said Yasuaki Iwamoto, an analyst at Okasan Securities Co. in Tokyo. “This alliance would be good news for Suzuki.”

Suzuki spokesman Takuma Mizuyoshi declined to comment as did a Volkswagen spokesman when reached by Bloomberg News.

Volkswagen is seeking to acquire a 10 percent stake in Suzuki, Germany’s Manager Magazin reported earlier, without saying where it got the information.

Volkswagen’s Expansion

Volkswagen Supervisory Board Chairman Ferdinand Piech is looking at bolstering his car company with three additional brands, Handelsblatt reported on May 14. Piech named MAN AG, the truckmaker in which Volkswagen already owns a stake, as one of the brands, according to the German newspaper.

Suzuki is known for its minicar models, including the WagonR and Carry vehicles, which are sold mainly in Japan, as well as for its Swift hatchback and Jimny small sport-utility vehicle. Suzuki and Toyota Motor Corp.’s Daihatsu Motor Co. subsidiary dominate sales of the tiny-car segment, which is helping the two Japanese manufacturers expand in emerging markets such as India. Suzuki’s sales make up about half of all cars sold in India.

GM, which first invested in Suzuki in 1981, sold its remaining 3 percent equity stake in November to raise funds. GM had held as much as 20 percent of the Japanese carmaker’s shares. The two carmakers had a joint venture in Canada producing the XL7 SUV, which ended in May. GM and Suzuki continue to cooperate on development of hybrid and fuel-cell vehicles.

Suzuki, along with Honda Motor Co. and Daihatsu, is among the few automakers to forecast a profit for the current fiscal year. Suzuki expects profit of 5 billion yen ($52 million) in the year ending in March, compared with Toyota’s 550 billion yen loss forecast.

Porsche Control

The possible partnership between the German and Japanese companies comes as VW is negotiating with Porsche SE about a possible merger with the sports-car maker. Porsche has gone from the potential buyer in the marriage to the one struggling to stay independent as the eight-month, back-and-forth fight for control between the carmakers drags on.

Porsche has been buying options and VW shares since 2005 to protect ties to its largest supplier, and in October, said it wants 75 percent ownership to add VW’s cash flow to its books.

The ownership feud is set against background of the worst slump in decades for the car industry with the bankruptcies of Chrysler LLC and GM in the U.S. and losses among European and Japanese carmakers.

In addition, stiffer regulations on vehicle emissions and fuel efficiency in Europe and the U.S. are forcing carmakers to accelerate development of smaller, gasoline-sipping models.

To contact the reporters on this story: Andreas Cremer in Berlin at acremer@bloomberg.net; Jeremy van Loon in Berlin at jvanloon@bloomberg.net.

Last Updated: June 26, 2009 02:57 EDT