Volkswagen and Ford Build Alliances, Increase Competitiveness

Volkswagen AG and Ford Motor Company are building broad alliances to improve competitiveness and better serve customers in an era of rapid change in the industry.

Volkswagen CEO Herbert Diess and Ford CEO Jim Hackett confirm that the company intends to develop medium-size commercial and pickup vans for the global market starting in early 2022.

“This alliance will drive significant scale and efficiency and allow the two companies to share investment in vehicle architecture that presents different capabilities and technologies,” Diess said in a press statement on Tuesday (1/15/2019).

The company estimates that commercial vans and pickup work will result in increased annual pre-tax operations, starting in 2023.

In addition, Volkswagen and Ford have signed a memorandum of understanding to investigate collaboration on autonomous vehicles, mobility services and electric vehicles and have begun to explore opportunities.

The two companies also said they were open to considering additional vehicle programs in the future. The team will continue to work 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. “This will not only drive significant efficiency and help both companies improve their fitness, but also gives us the opportunity to collaborate in shaping the next era of mobility.”

Diess added, “Volkswagen and Ford will utilize our collective resources, innovation capabilities and complementary market positions to better serve millions of customers worldwide. At the same time, this alliance will be the foundation of our efforts to improve competitiveness. ”

Alliances, which do not require cross ownership between the two companies, will be arranged by a joint committee. This committee will be led by Hackett and Diess and will include senior executives from both companies.

Commercial vans and pickup collaboration between Ford and Volkswagen both have strong commercial van and pickup businesses throughout the world, with popular signage such as the Ford Transit family and Ranger and Volkswagen Transporter, Caddy and Amarok.

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The volume of the company’s collective light commercial vehicles from 2018 amounts to around 1.2 million units globally, which can represent the industry’s highest volume collaboration as a production scale.

Demand for medium pickup and commercial vans is expected to grow globally in the next 5 years. This alliance will enable companies to share development costs, increase their respective production capacities, increase the capabilities and competitiveness of their vehicles and provide cost efficiency, while maintaining the characteristics of different brands.

Through this alliance, Ford will engineer and build medium-sized pickups for the two companies which are expected to be marketed 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.

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