In Brief

Why new Ford and Volkswagen alliance is ‘unusual’

The two companies will cooperate on development of pickup trucks and vans in bid to cut costs

Ford and Volkswagen are teaming up in an alliance that could see the two motoring giants collaborating on electric cars and autonomous driving technology. 

Announced at the North American International Auto Show in Detroit, the partnership will begin with the joint development of mid-size pickups and commercial vehicles for the global market, says Auto Express

VW Group chairman Herbet Diess said the German carmaker’s next Amarok pickup truck will share components with one of Ford’s production platforms. 

The companies are also talking about co-developing electric vehicles, in a bid to reduce the hefty expenses involved in developing batteries and autonomous driving systems, the BBC reports. 

The partnership’s first vehicles are expected to hit the market in 2022 and to begin boosting profits by the following year, adds the broadcaster.

Although such partnerships are fairly common in the motoring world, the Ford and Volkswagen tie-up is “unusual”, since it will be “governed by a joint committee containing top executives from both companies”, instead of a more standard “cross-ownership structure”, says Sky News.

This means Ford and VW will not own shares in each other. Both firms have also said that the alliance won’t create any new jobs. 

The partnership is one of the largest non-mergers since the formation of the Renault-Nissan Alliance in 1999, and comes as the motoring industry enters a period of rising costs and “plateauing sales” in major markets, reports the Financial Times

Carmakers are pushing to “invest in new technologies” while also adapting their current line-ups to meet tough emissions regulations, the FT adds.

Ford boss Jim Hackett said: “It’s my opinion that you can’t do this alone. We believe the fundamental shift is helping automakers to focus on their specific strengths.”

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