Ford and Volkswagen Form New Partnership

Ford Motor Company and Volkswagen Group have recently combined to form a global alliance with a plan to start making pickup trucks. Early this week, the automakers announced they will also build commercial vans and might extend their partnership to include electric and autonomous vehicles and even new mobility services. 

Both companies will build their medium-sized pickup trucks as early as 2022.  Similarly we can expect to see their vans hit the market around the same time. However, Volkswagen has plans to build a city van and Ford’s will be the larger, one-ton commercial Transit van.  

It should be noted that neither company will be taking an ownership stake in the other.  Instead, the alliance will be have a joint oversight committee with equal members representing each of the two automakers.   

This new partnership comes at an opportune time in the auto industry.  While consumers demand for electric vehicles is increasing, autonomous technology is also shifting public mindset about what transportation could be.  Indeed, nearly every automaker is making this shift as well as exploring alternative mobility services like car fleets and even bikes and scooters. 

Ford CEO Jim Hackett commented in a press call, “It’s my opinion that you can’t do this alone,” speaking of the industry-wide transition.  “We believe the fundamental shift is healthy, as it allows automakers to focus on their respective strengths and participate in developing these new mobility solutions, yet at the same time for our customers, offer many competitive options that they didn’t think they might get from automotive companies.”

Hackett follows up by reminding that because these technologies are so popular right now, car makers are seeing financial investments come from outside the auto industry.  He notes that these outside interests have played a big role in Ford and Volkswagen coming together. 

After all, the two companies happen to have complimentary approaches to these new, industry-shifting technologies.  For one, Volkswagen is already set to roll out an entirely new line of completely electric vehicles, thanks to a big investment in this new technology. And Ford has been hinting at its very first electric vehicle, which is likely to be part of that new 2020 rollout. 

Similarly, Volkswagen CEO Herbert Diess commented, “It would make a lot of sense to cooperate with an American player given that the regulatory conditions for preparing the breakthrough of autonomous driving are more advanced in the US than they are in Europe.”