Ford, Volkswagen Discuss Allying On Joint Projects, Starting With Commercial Vehicles

Ford Motor Company announced this week that it has signed a Memorandum of Understanding with German automotive giant Volkswagen to explore a strategic alliance that could result in new, shared products. So far, Ford has indicated only that the two automakers are looking into co-developing a range of commercial vehicles, although more pedestrian, mass-market offerings are a possibility.

Ford bills its agreement with Volkswagen as a way to “strengthen each company’s competitiveness and better serve customers globally.” The strategic alliance wouldn’t involve any equity arrangements such as cross-ownership stakes, Ford notes.

“Ford is committed to improving our fitness as a business and leveraging adaptive business models – which include working with partners to improve our effectiveness and efficiency,” says Ford President of Global Markets Jim Farley. “This potential alliance with the Volkswagen Group is another example of how we can become more fit as a business, while creating a winning global product portfolio and extending our capabilities.

“We look forward to exploring with the Volkswagen team in the days ahead how we might work together to better serve the evolving needs of commercial vehicle customers – and much more.”

Ford is already one of the top-selling commercial vehicle brands in Europe, but a strategic alliance with Volkswagen could allow the American automaker to split the costs of implementing more electrification into its lineup, among other things. A plug-in-hybrid version of the Ford Transit Custom is already in the pipeline for 2019, with trial testing of the vehicles underway in the UK and Spain.

“Markets and customer demand are changing at an incredible speed,” says Head of Volkswagen Group Strategy Dr. Thomas Sedran. “Both companies have strong and complementary positions in different commercial vehicle segments already. To adapt to the challenging environment, it is of utmost importance to gain flexibility through alliances.”