Volkswagen AG and Ford Motor Co said on Tuesday they will join forces on commercial vans and pickups and are exploring shared development of electric and self-driving technology, actions meant to save the auto makers billions of dollars.
Ford and VW announced their partnership against the backdrop of the 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 stakes, the companies said.
The expanding alliance, which will be governed by a joint committee that includes the CEOs of both companies, highlights the growing pressure on global auto makers 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.
Ford will provide more details on how the alliance affects Ford’s regional operations in the coming weeks, but does not expect any job cuts in Ford plants as a result of the alliance, Ford chief executive officer Jim Hackett said.
Ford will engineer and build medium-sized pickups for both companies, Volkswagen said.
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 co-operation 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, VW chief executive officer Herbert Diess said.
VW shares were up 0.6 per cent in Frankfurt. Ford gained 0.7 per cent to $9.05 in pre-market US trading.