VW, Ford team up on trucks, eye deals on EVs, self-driving cars

January 16, 2019 09:29
Ford chief executive Jim Hackett (left) and his counterpart at Volkswagen, Herbert Diess, pose for photographers at the North American International Auto Show in Detroit on Tuesday. Photo: Reuters

Volkswagen AG and Ford Motor Co. said they will join forces on commercial vans and pickups and are exploring joint development of electric and self-driving technology, Reuters reports.

Announcing their partnership against the backdrop of the Detroit auto show, the two carmakers said the tie-up will not involve a merger or equity stakes. It will start with sales of vans and medium-sized pickups in 2022.

“It is no secret that our industry is undergoing fundamental change, resulting from widespread electrification, ever stricter emission regulation, digitization, the shift towards autonomous driving, and not least the changing customer preferences,” Volkswagen chief executive Herbert Diess told reporters and analysts on a conference call.

“Carmakers around the globe, therefore, are investing heavily to align their portfolios to future needs and accelerate their innovation cycles,” he said. “In such an environment, it just makes sense to share investment.”

The expanding alliance, which will be governed by a joint committee that includes the CEOs of both companies, highlights the growing pressure on global automakers to manage the costs of developing electric and self-driving vehicles, as well as technology to meet tougher emissions standards for millions of internal combustion vehicles they will sell in coming years. 

“You can’t do this alone,” Ford CEO Jim Hackett said on the call. 

Ford promises to provide more details on how the alliance will affect its regional operations in coming weeks, but does not expect any job cuts in its plants as a result of the alliance, Hackett said.  

Ford will engineer and build medium-sized pickups for both companies, Volkswagen said. 

Ford officials said the VW pickups will initially be available only in the South American, European and African markets. 

Ford will also engineer and build larger commercial vans for European customers, while Volkswagen will develop and build a city van. Vans could be built in Ford’s plant in Turkey, VW said.  

The companies estimate the commercial van and pickup cooperation will yield improved annual pretax operating results starting in 2023. 

Ford and VW have signed a memorandum of understanding to jointly develop electric and self-driving vehicles, Diess said. 

Both executives said they were optimistic those deals would be finalized but provided no timeline. 

Sources previously said the framework of such a deal would include VW investing in Ford’s autonomous vehicle operations, including its Argo artificial intelligence business. 

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