Ford Motor and VW Group In Talks About Developing Vehicles

Ford Motor, one of the Big Three automakers in the U.S. and Germany-based Volkswagen AG are in talks to possibly work together on several projects, including the joint development of commercial vehicles that would be helpful in them competing better in today’s global market that demands better technology and vehicles that have lower emissions and are more efficient.

The two automakers announced this week they signed an agreement to look into a strategic alliance. Any type of alliance between Ford and VW would not involve ownership stakes, said Ford in its announcement on Tuesday.

The news of a possible alliance follows the announcement by Ford to build a campus for autonomous and electric vehicles in one of the oldest neighborhoods in Detroit.

The two carmakers contend the potential alliance would make them more competitive and better serve their customers worldwide. Executives from Ford and VW are focusing on the alliance being for developing commercial vehicles, and not necessarily cars and trucks for consumers.

The head of VW’s strategy division Thomas Sedran said that the two companies already have strong, complementary positions in different vehicle segments.

In order to adapt to a challenging environment, it is important to have flexibility via alliances, added Sedran. He continued by saying the core element of VW Group Strategy 2025 is just that, and the potential cooperation with Ford is considered an opportunity to improve on competitiveness for both companies on a worldwide basis.

When commercial is mentioned, it is referring to delivery vehicles, vehicles in fleets and those used in commercial applications. Details are unclear after that, and will not be released until they enter into full blown cooperation.

It is most likely the deal will center on finding ways in which to build as well as sell commercial vans that need to meet the strict rules to protect the environment.

Several cities such as Paris and London are tightening the regulations for new delivery vans as well as other types of commercial vehicles.

Some cities in Europe are banning diesel the staple for commercial vehicles.

The restrictions have made automakers pivot toward hybrid and electric vehicles.