VW and Ford announce alliance

Volkswagen is now working with Ford on light commercial vehicles, but hopes for more.

From 2022 to be started with the development of vans and mid-sized pick-ups, as Volkswagen Group CEO Herbert Diess and the head of US rival Jim Hackett confirmed on Tuesday in Detroit.

From 2023, Allianz should have a positive impact on the operating results of both companies. It also examines possible cooperation on electromobility, autonomous cars and mobility services. Job cuts due to cooperation with VW does not expect Hackett.

Some experts see alliances of major car manufacturers such as VW and Ford as trend-setting for the entire industry. The industry faces increasing pressure to join forces in the face of thin profit margins and high investment. In particular, the shift to newer technologies, such as electric drives or robotic cars, is creating huge funding needs that could require new alliances.

Diess also explained that in view of the change in the entire industry, it makes sense to divide investments and bundle innovative forces. At present, Ford is in talks about how the MEB electric platform can be shared. He made it clear just how important he considers cooperation to be in autonomous driving: “From the point of view of Volkswagen, cooperation with an American company in this area would be extremely useful,” he explained.

In order to make autonomous driving a breakthrough, it needs the “right regulatory framework” – “here the US is much further than we in Europe”. Diess explained that with cooperation on vans and mid-size pick-ups as well as possible cooperation on electromobility and autonomous driving “our alliance would be optimally positioned to become the driving force in this regard as well”. Currently talking about whether VW could combine its efforts in autonomous driving with those of the Ford subsidiary Argo.

In the middle of December the “Handelsblatt” had reported that the talks about even deeper cooperation were deadlocked. VW boss Diess resist the payment of a larger sum of money to be able to get involved in Argo. This instead offers the Americans the use of the e-car kit.

Ford boss Hackett said the alliance was an event that would change the industry: “It will also enable us to shape the new era of mobility.” The market for self-propelled and electric cars is just being formed, he explained the wait-and-see attitude to joint projects.

The aim of the partnership is to save costs in the development and construction of light commercial vehicles. According to Diess, both manufacturers in the segment are too small to play a major role worldwide. A mutual equity participation of the two companies he further excluded.

Together, both companies sold around 1.2 million light commercial vehicles in 2018. According to VW, the alliance would thus be the industry’s highest volume collaboration in the segment. Hackett and Diess emphasized that jointly developed vehicles should be launched under separate brands.

According to the VW boss, the Ford factory in Turkey is an option to build joint vehicles. Thomas Sedran, head of the light commercial vehicles division at VW, said the factories in Turkey and Poland had low costs. But nothing has been decided on the various models yet.

Ford is to develop and build mid-size pickups for both companies, which are expected to be launched in 2022. Ford manager Jim Farley said it was all about vehicles for South America, Africa and Europe. This had recently stated that the partnership with Ford offered a chance to continue the pickup Amarok “profitable”. Ford also plans to develop and produce larger trucks for the European market. Volkswagen will then bring a city delivery van for both partners on the market.