Volkswagen AG and Ford Motor Company have made formal agreements to work together in producing commercial vehicles globally.
The manufacturers said the broad alliance would position the companies to boost competitiveness and better serve customers in an era of rapid change in the industry.
Volkswagen chief executive Dr. Herbert Diess and Ford chief executive Jim Hackett said in a release 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 designs 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.
Alliance does not involve cross-ownership between the two companies
In addition, 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.”
Diess added: “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.”
The alliance, which does not entail cross-ownership between the two companies, will be governed by a joint committee. This committee will be led by Hackett and Diess and will include senior executives from both companies.
Commercial van and pickup collaboration
Ford and Volkswagen both have strong commercial van and pickup businesses around the globe, with popular nameplates such as the Ford Transit family and Ranger as well as the Volkswagen Transporter, Caddy and Amarok.
The companies’ collective light commercial vehicle volumes from 2018 totaled approximately 1.2 million units globally, which could represent the industry’s highest-volume collaboration as production scales.
Demand for both medium pickups and commercial vans is expected to grow globally in the next five years. A release said the alliance would enable the companies to share development costs, use their respective manufacturing capacity, boost the capability and competitiveness of their vehicles and deliver cost efficiencies while maintaining distinct brands.
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.