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Ford, VW signal plan to join forces

In the van: Ford and Volkswagen vans might one day come from the same base under a proposal for a strategic alliance now being negotiated by the two motor companies.

Auto giants Ford and Volkswagen in talks about joint development of LCVs

20 Jun 2018

FORD and Volkswagen are exploring a proposal for a strategic alliance to share development of several joint projects, including a range of commercial vehicles.
The two automotive giants have released a joint statement saying they had signed a memorandum of understanding (MOU) to investigate the proposal to work together on potential projects across “a number of areas”.
The companies – selling more than 16 million vehicles a year between them – say any such alliance would not involve equity arrangements, such as cross ownership.
The move could have long-term implications for Ford in Australia where Ford Asia-Pacific’s vehicle development operation heads development of one of Ford’s leading global commercial vehicles, the Ranger.
Australian engineers have also worked on the Chinese market version of Ford’s Transit van.
However, Ford Australia communications manager Jasmine Mobarek told GoAuto is was too early to speculate on any effects that such an arrangement could have.
“Our MOU covers conversations about potential collaborations across a number of areas,” she said. “For instance, we are exploring how and whether to collaborate on a range of commercial vehicles for customers. It is premature to share additional details at this time.”
Released simultaneously in Detroit and Wolfsburg, the statement indicates that the prime reason for such a collaboration is to cut costs and strengthen each other’s competitiveness.
Most pundits believe that any such deal would start with commercial vans, including the joint development of electrified powertrains and autonomous control for a new generation of cargo luggers.
Ford and VW both have successful van ranges, with Ford’s Transit family and VW’s Caddy, Transporter and Crafter all among the top-sellers in several markets.
However, with increasing competition from South Korea and China, the two companies clearly feel that they need to cut costs in the development phase to maintain their competitiveness.
Said Ford global markets president Jim Farley: “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.
“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.”
His comments were echoed by Volkswagen’s head of group strategy, Thomas Sedran, who said: “Markets and customer demand are changing at an incredible speed. 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. This is a core element of our Volkswagen Group Strategy 2025.
“The potential industrial co-operation with Ford is seen as an opportunity to improve competitiveness of both companies globally.”
The companies have promised to provide updates and additional details as talks progress.
In Australia, Ford Asia-Pacific designers and engineers are currently working on the next-generation Ranger, along with its passenger spin-offs, the Everest and Bronco.
A revised version of the current Ranger is set to go into production in the United States later this year for sale across North America, while a Thai-built version of the one-tonner ute is also set to be launched in the world’s biggest market, China, later this year.
So far, there is no suggestion that the Ranger and Volkswagen’s Argentinian-built equivalent, the Amarok, will be joined at the hip in a future development.
Like the respective van ranges, these pick-ups have both been successful in their own right, building new market segments in fresh markets for both brands.
It is possible, however, that the two companies could contribute various aspects to a future pick-up, with, for example, VW working on an all-electric powertrain while Ford developed the basic architecture.
VW is perceived to be more advanced with its electrification program than Ford, which might be one reason that the American company might be willing to jump into bed with its German rival.
However, Ford has already announced that it is set to launch a plug-in hybrid version of its Transit Custom. This vehicle is being tested in London ahead of production in 2019.

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