Ford & Volkswagen Announce Global Alliance to Build Pickup Trucks and Vans
【Summary】The Ford Motor Company and German automaker Volkswagen AG today announced an alliance to make both automakers more competitive, as the auto industry undergoes rapid transformation. The two automakers said they will collaborate to develop commercial vans and medium-sized pickup trucks.
DETROIT — The Ford Motor Company and German automaker Volkswagen AG today announced an alliance to make both automakers more competitive, as the auto industry undergoes rapid transformation. The two automakers said they will collaborate to develop commercial vans and medium-sized pickup trucks.
The alliance will enable the automakers to share development costs, leverage their respective manufacturing resources, boost the competitiveness of their vehicles and deliver cost efficiencies, while maintaining each company's distinct brand characteristics.
As part of the collaboration, Ford will engineer and build medium-sized pickups for both companies. In addition, Ford intends to engineer and build larger commercial vans for European customers, and Volkswagen intends to develop and build a city van.
Volkswagen CEO Dr. 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 include the sharing of vehicle architectures to save costs.
In addition, Volkswagen and Ford have signed a memorandum of understanding on possible collaboration on self-driving vehicles, mobility services and electric vehicles. Both companies said they were open to considering additional vehicle programs in the future. The two automakers 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."
Ford President and CEO, Jim Hackett, left, meets with Dr. Herbert Diess, CEO of Volkswagen AG, at the North American International Auto Show in Detroit. (Photo: Carlos Osorio, AP)
Ford is looking to position itself as a mobility provider, as the auto industry expects a decline in personal car ownership and a move towards on-demand mobility, vehicle subscription services, autonomous ride-hailing vehicles, and even electric bike sharing.
Volkswagen is looking to phase out internal combustion engine vehicles in favor of EVs. The automaker said last month that it will have the capacity to build up to 15 million electric vehicles. The company is investing more than $12.5 billion into electric and autonomous vehicles by 2023.
"Volkswagen and Ford will harness our collective resources, innovation capabilities and complementary market positions to even better serve millions of customers around the world. At the same time, the alliance will be a cornerstone for our drive to improve competitiveness." said Diess.
Both Ford and Volkswagen said the alliance does not include cross-ownership between the two companies and will be governed by a joint committee. This committee will be led by Hackett and Diess and will include senior executives from both companies.
Ford and Volkswagen both have strong commercial van and pickup businesses around the globe, with popular name plates such as the Ford Transit family of vans, Ranger pickup, Volkswagen Transporter van and Amarok pickup truck.
In a separate announcement, Volkswagen said on Monday it will invest $800 million in its Chattanooga, Tennessee assembly plant to build electric vehicles. The plant is VW's first electric car factory in the U.S.
In 2018, Ford and Volkswagen produced approximately 1.2 million commercial vehicles globally. The deal between Ford and VW could represent the auto industry's biggest ever collaboration.
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