Volkswagen AG and Ford Motor Company recently announced that they’ll be working together to produce vehicles in the future.
Volkswagen CEO Dr. Herbert Diess and Ford CEO Jim Hackett confirmed that the companies intend to develop commercial vans and medium-sized bakkies 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.
In addition, Volkswagen and Ford have signed a memorandum of understanding to investigate collaboration on autonomous vehicles, mobility services and electric vehicles and have started to explore opportunities. Both companies also said they were open to considering additional vehicle programs in the future. The teams will continue working through details in the 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 added: “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. This committee will be led by Hackett and Diess and will include senior executives from both companies.
Obviously, this has huge implications for the local bakkie and van segment. Both Ford and Volkswagen sell great examples of both, so what does it mean going forward?
Combined, these two manufacturers sold 1.2 million vans and bakkies in 2018, so they obviously know what the customers want. This is reflected locally as well, with the Ranger currently in third place as far as passenger vehicles are concerned. The Amarok doesn’t sell as well, but Volkswagen’s van and MPV sales are definitely up there.
Demand for these kinds of vehicles is expected to grow significantly, especially in the medium-sized bakkie and commercial van segments. This alliance will enable the companies to share development costs, leverage their respective manufacturing capacity, boost the capability and competitiveness of their vehicles and deliver cost efficiencies, while maintaining distinct brand characteristics. In layman’s terms, Ford and Volkswagen will be able to design and build the next-generation Ranger and Amarok for much cheaper, which will hopefully then reflect in the pricing. Having said that, both parties are adamant that they’ll add their own unique touches to the various models.
Ford will be in charge of building the medium-sized bakkie for both companies and they’re expected to go on sale in 2022. For both parties, Ford intends to engineer and build larger commercial vans for European customers, and Volkswagen intends to develop and build a city van.
This makes perfect sense to us, because it plays to the strengths of both companies. While the Amarok is a stunning double cab, the Ford Ranger is the only double cab that has ever been a real challenger to the segment-dominating Toyota Hilux. And Volkswagen’s has an equally impressive history with the likes of the Caravelle.
The first results of this partnership are obviously far from making any kind of official debut, but it will be interesting to see how this partnership works out.
Taking the combined experience of both parties into account, there’s not much chance of them getting it wrong.
