Ford and Volkswagen have formed a global alliance for the development of future cars which include vans and pickup trucks. The two automakers are also planning on EVs and AVs along with mobility services as a part of this alliance which will help both the company to reduce costs.
The alliance between Ford and Volkswagen, which was made known at the ongoing 2019 Detroit Motor Show, will see neither of the companies owning a stake in each other as was seen in the case of Renault, Nissan and Mitsubishi. This is a similar alliance which Ford has formed with Mahindra in India. With the help of such alliances, Ford aims to save costs of up to $25 billion in the next 3 to 5 years.
Ford and Volkswagen will form a joint committee of equal persons representing each company to oversee these new developments. Though this announcement has just been made, Ford and Volkswagen had already signed a memorandum of understanding in June 2018. This was done to explore several joint projects which also include the development of a range of commercial vehicles.
The first offering from this alliance is said to be a medium size pickup truck which will be launched in the US in 2022. Later, Volkswagen will build a smaller city van while Ford will design and build medium size pickups for companies and larger commercial vans for European customers. This alliance will bring about a change in the auto industry with new electric vehicles and autonomous technology also being mulled.
The first such electric vehicle was teased by Ford and planned for sale in 2020. In the area of autonomous vehicles, Ford has invested $1 billion in Argo, an artificial intelligence startup that is developing software stack for self driving cars and this technology is currently under test. Volkswagen also has other partnerships with self driving companies but no real world testing has been undertaken.
Apart from the development of new products and technologies, the alliance between Ford and Volkswagen could be due to the fact that Ford has been facing some constraints. The automaker has been planning layoffs and plant closures in Europe with sale having fallen 2.3 percent in the first 11 months of last year.
Ford has also been facing sales issues in China where profits were flat in 2018. It is in these very two markets that Volkswagen commands sales and hence the partnership will benefit both companies. More details of this Ford Volkswagen partnership will be made known in the weeks ahead.