VW, Ford team up on vans to collaborate on EVs, self-driving cars

Source:Reuters - Global Times Published: 2019/1/17 18:03:41

Volkswagen and Ford Motor said on Tuesday they will join forces on commercial vans and pickups and are exploring joint development of electric and self-driving technology, actions meant to save the automakers billions of dollars.

Ford and VW announced their partnership at the 2019 Detroit Auto Show. The tie-up, which starts with sales of vans and medium-sized pickups in 2022, will not involve a merger or equity stake, the companies said.

"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 in a conference call.

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

A deal centered on vans and pickups had been expected. Investors are now focused on the potential for additional deals they believe could offer greater savings. Those include potential deals around the development of electric or self-driving vehicles, as well as combining forces in markets including North America, South America, Europe and China.

The two CEOs did not discuss in detail alliances in specific markets, including Latin America, where Ford is losing money.

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 the coming years.

"You can't do this alone," Ford's chief executive, Jim Hackett, said during the call.

Ford will provide more details on how the alliance will affect Ford's regional operations in coming weeks, but does not expect any job cuts in its plants, he 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 also 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.

"Automakers aren't just competing with each other anymore, they're under intense pressure from well-funded tech companies," said Jessica Caldwell, executive director of industry analysis at Edmunds.

"Cutting costs by sharing vehicle architectures and manufacturing facilities is just table stakes in this new world," she added.


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