Ford CEO Jim Hackett and Volkswagen Group CEO Herbert Diess
The commercial vehicle operations of Ford and Volkswagen will be much more closely aligned in the near future.
The two announced Tuesday a substantial partnership that will see a number of commercial vehicles jointly developed by the two brands.
Each will also build vehicles for the other brand, something VW CEO Herbert Diess hinted at last month month following a meeting with White House officials, where he stated VW could share some of Ford’s spare capacity in the United States.
Under the new partnership, Ford will develop and build mid-size pickups for both brands, likely next-generation versions of the Ford Ranger and VW Amarok. The current Ranger has only just gone on sale in the U.S. but the version we get is an update of a model that’s been sold overseas since the start of the decade.
Volkswagen Atlas Tanoak concept
VW hinted at a new mid-size pickup truck with the unveiling of the Atlas Tanoak concept last March. By potentially having Ford build the vehicle in the U.S., VW will be able escape the 25-percent Chicken Tax placed on light truck imports.
Ford will also develop and build large commercial vans for both brands, to be sold in Europe. These will likely be next-generation versions of the Ford Transit and VW Crafter.
In return, VW will develop and build small city vans, for itself and Ford. These will most likely be replacements for the Ford Transit Connect and VW Caddy.
The first of the jointly developed vehicles are due in 2022.
2019 Ford Transit Connect Wagon
Ford and VW’s combined sales of light commercial vehicles topped 1.2 million units in 2018 and demand is projected to grow over the coming years. The partnership between the two brands will enable them to cut costs and boost economies of scale, which should help their respective bottom lines.
History, however, has shown not all marriages are perfect matches. One of the most recent American-European tie-ups, Daimler-Chrysler, ended miserably. Ford has also had past experiences that could be cause for caution in its Jaguar, Volvo, Aston Martin, and Mazda connections. This time at least, both parties are adamant there won’t be any equity tie-ups.
They also haven’t ruled out further ties. In addition to considering future collaborations on vehicle development, the two have signed a memorandum of understanding in the area of electric cars, self-driving cars and mobility services, and they are actively exploring opportunities.
There have been rumors of the two partnering in the area of self-driving cars. In particular, we could see VW invest in autonomous technology startup Argo AI, which already counts Ford as a key investor, while Ford could gain access to VW’s electric car technology and possibly production capacity, too. VW announced just on Monday that it will start production of EVs based on its MEB modular platform at its plant in Chattanooga, Tennessee; a Ford EV could also potentially be built at the Chattanooga site. Stay tuned.