Volkswagen AG and Ford Motor Company announced the first formal agreements in a broad alliance that positions the companies to boost competitiveness and to better serve customers in an era of rapid change in the industry.
Volkswagen CEO Dr, Herbert Diess, and Ford CEO, Jim Hackett, confirmed that the companies intend to develop commercial vans and medium-sized bakkies for global markets from 2022. The alliance will drive significant scale and cost efficiencies and enable both companies to share investments in vehicle design that delivers distinct capabilities and technologies.
The companies estimate the commercial van and bakkie cooperation will yield improved annual pre-tax operating results, 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 started to explore opportunities in these fields. Both companies said they were open to considering additional vehicle programmes in the future. The teams will work through details in the coming months.
“This alliance will help both companies create value and meet the needs of our customers and society,” Hackett said. “It will drive significant efficiencies and help both companies improve their fitness, and give 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 better serve [our] millions of customers world-wide. At the same time, the alliance will be a cornerstone in our drive to improve competitiveness.”
The alliance, which does not entail cross-ownership between the two companies, will be governed by a joint committee. The committee will be led by Hackett and Diess and will include senior executives from both companies.
Commercial van and bakkie collaboration
Ford and Volkswagen both have strong commercial van and bakkie businesses globally, with popular nameplates such as the Ford Transit family, Ranger and the Volkswagen Transporter, Caddy and Amarok. The companies’ collective light commercial vehicle volumes from 2018 were about 1.2 million units globally, which could represent the industry’s highest-volume collaboration as production scales.
Demand for both medium bakkies and commercial vans is expected to grow globally in the next five years. The alliance will enable the companies to share development costs, leverage their respective manufacturing capacity, boost the capability and competitiveness of their vehicles and deliver cost efficiencies, while maintaining distinct brand characteristics.
Through the alliance, Ford will engineer and build medium-sized bakkies for both companies which are expected to be on the market as early as 2022. Ford intends to engineer and build larger commercial vans for European customers, and Volkswagen intends to develop and build a city van. – Press release
