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Ford and VW announce collaboration

The long-awaited collaboration between Ford and Volkswagen (VW) has been announced at the Detroit motor show.

Volkswagen CEO Herbert Diess and Ford CEO Jim Hackett confirmed that the companies intend to develop commercial vans and medium-sized pickups for global markets beginning as early as 2022. The alliance will drive significant scale and efficiencies and enable both companies to share investments in vehicle architectures that deliver distinct capabilities and technologies.

The companies estimate the commercial van and pickup cooperation will yield improved annual pre-tax operating results, starting in 2023. 

Also, Volkswagen and Ford have signed a memorandum of understanding to investigate collaboration on autonomous vehicles, mobility services and electric vehicles and have started to explore opportunities. Both companies also said they were open to considering additional vehicle programs in the future. The teams will continue working through details in the coming months.

‘Over time, this alliance will help both companies create value and meet the needs of our customers and society,’ Hackett said. ‘It will not only drive significant efficiencies and help both companies improve their fitness, but also gives us the opportunity to collaborate on shaping the next era of mobility.’

‘As someone with less than two years in the industry, it’s my opinion that you can’t do this alone,’ Hackett said on a conference call with reporters. ‘We believe this fundamental shift is healthy. It allows us to focus on our strengths while at the same time, offer many competitive options.’

Diess added: ‘Volkswagen and Ford will harness our collective resources, innovation capabilities and complementary market positions to better serve millions of customers around the world. At the same time, the alliance will be a cornerstone for our drive to improve competitiveness.’  

Through the alliance, Ford will engineer and build medium-sized pickups for both companies which are expected to go to market as early as 2022. For both parties, Ford intends to engineer and build larger commercial vans for European customers, and Volkswagen intends to develop and build a city van.

Future plans

Diess suggested that the carmakers are looking at combining their autonomous vehicle development in a move that has been rumoured for some time. This would include Ford-owned Argo AI, as well as VW research groups in Wolfsburg and Munich. On the EV side, Ford is looking to utilise VW’s MEB platform for electric vehicles. 

‘It’s an attractive area,’ Hackett said. ‘Both the EV and AV are big costs for investment. Both are important to both companies’ future. That is part of the incentive to find ways to cooperate.’

However, citing privacy concerns, neither could confirm when any announcement on platform and development sharing would take place, instead reiterating that talks were ongoing and positive.

The collaboration announcement highlights the need for manufacturers to join certain aspects of their businesses as they look to compete in an ever-changing market. As another example, BMW’s mobility platform DriveNow merged with Daimler’s car2go in April 2018.