As widely expected, Volkswagen and Ford have announced the first formal agreements of broad alliance that will see Ford develop medium pickup trucks for worldwide sale by both automakers, collaboration on vans for Europe and likely partnerships for mobility and electrification.

VW CEO Herbert Diess and Ford CEO Jim Hackett confirmed jointly the companies would develop commercial vans and medium-sized pickups for global markets beginning as early as 2022.

“The alliance will drive significant scale and efficiencies and enable both companies to share investments in vehicle architectures that deliver distinct capabilities and technologies,” they said in a statement.

They estimate the commercial van and pickup cooperation “will yield improved annual pre-tax operating results, starting in 2023”.

The pair have signed a memorandum of understanding to “investigate collaboration on autonomous vehicles, mobility services and electric vehicles and have started to explore opportunities”.

Both said they were open to considering additional vehicle programmes in the future and will continue working through details in coming months.

“Over time, this alliance will help both companies create value and meet the needs of our customers and society,” Hackett said. “It will not only drive significant efficiencies and help both companies improve their fitness, but also gives us the opportunity to collaborate on shaping the next era of mobility.”

Diess said: “Volkswagen and Ford will harness our collective resources, innovation capabilities and complementary market positions to even better serve millions of customers around the world. At the same time, the alliance will be a cornerstone for our drive to improve competitiveness.” 

The alliance, which does not entail cross-ownership between the two companies, will be governed by a joint committee headed by Hackett and Diess and including senior executives from both companies.

Commercial van and pickup collaboration

Ford and Volkswagen both have strong commercial van and pickup businesses around the globe, with popular nameplates such as the Ford Transit family and Ranger as well as the VW Transporter, Caddy and Amarok.

The companies’ collective light commercial vehicle volumes from 2018 totaled around 1.2m units globally which could represent the industry’s highest-volume collaboration as production scales.

Demand for both medium pickups and commercial vans is expected to grow globally in the next five years. The alliance will enable the companies to share development costs, make best use of respective manufacturing capacity, boost the capability and competitiveness of their vehicles and deliver cost efficiencies, while maintaining distinct brand characteristics.

Through the alliance, Ford will engineer and build medium-sized pickups for both companies which are expected to go on sale as early as 2022.

For both parties, Ford will engineer and build larger commercial vans for European customers while Volkswagen develops and build a city van.

VW and Toyota partnered in Europe from the mid 1990s, sharing the Hilux pickup truck which VW built for both brands, badging its own as the Taro.

VW until recently shared a large van line with Daimler’s Mercedes-Benz Sprinter but both companies went their own ways for the most recent generation.

Michelle Krebs, executive analyst at Autotrader, said: “The industry likely will see more kinds of collaboration like the one announced today by Ford and VW. A single automaker can’t be all things to all customers around the globe as vehicle and technology development become increasingly more expensive.

“Interesting that yesterday, Toyota announced the Supra, developed with BMW is being built by a supplier in Austria.”