At the Detroit Motor Show there were not only car novelties. The official announcement of a new global alliance between Ford and Volkswagen turned out to be one of the highlights of the show.
It is the culmination of a process started last June, when both builders signed a memorandum of understanding to jointly explore strategic opportunities.
Unlike the (currently threatened) Renault-Nissan-Mitsubishi Alliance, this new global alliance between the Ford Motor Company and Volkswagen AG does not involve any capital transfers between the two companies.
After all, what is this new alliance about?
The various agreements established focus on the development of commercial vehicles and pick-ups together , confirmed by the CEOs of both manufacturers, Jim Hackett by Ford and Herbert Diess by Volkswagen, boosting economies of scale and competitiveness.
Jim Hackett, CEO of Ford Motor CompanyIt (alliance) will not only lead to significant efficiencies and help both companies improve their skills, it will also give us opportunities to collaborate in shaping the next era of mobility.
The practical results of this alliance will begin to be known in 2022 at the latest, with the effects on operational results being felt in 2023. The sharing of development costs and the leveraging of the production capacities of both will allow greater cost efficiencies .
Between Ford and Volkswagen, 1.2 million light commercial vehicles were sold in 2018 , in a market sector that continues to grow globally, justifying the creation of this new alliance.
But there is more… Not only is the door open for the development of more vehicles together in the future, a new memorandum of understanding was signed “for the investigation of a collaboration in autonomous vehicles, mobility services and electric vehicles, and exploration began of opportunities.”
Herbert Diess, CEO Volkswagen AGVolkswagen and Ford will combine their feature sets, innovation capabilities and complementary market positions to even better serve millions of customers around the world. At the same time, this alliance will be a key foundation in our effort to improve competitiveness.
What's next?
Of the global alliance between Ford and Volkswagen, the highlight goes to the development of a new mid-range pick-up — demand has not stopped growing — which, as they say, future generations of Ford Ranger and Volkswagen Amarok.
The development and production of this new pick-up will be in charge of Ford, with arrival on the market no later than 2022. In addition to the clear advantages in terms of economies of scale, it could also give Volkswagen's much sought after access to the lucrative market pick-ups in the US — due to the US chicken tax, imported pick-ups are taxed at 25%, nullifying any chance of competitiveness against locally produced rivals.
Ford will also be responsible for the development and production of a new generation of large commercial vehicles destined for Europe, with Volkswagen in charge of the development and production of a city commercial vehicle.
It is not the first time…
… that there is a partnership or alliance between Ford and Volkswagen. In 1991 both builders established a joint-venture on equal parts which would be called Autoeuropa . This would culminate in the development of the MPV Volkswagen Sharan, SEAT Alhambra and Ford Galaxy and in the construction of a modern production unit, in a global investment of 1970 million euros.
In 1999, Volkswagen would take full control of the share capital of Autoeuropa, with the production of the Ford Galaxy ending in 2006, four years before the arrival of the second generation of “Palmela minivans”.
Autoeuropa remains the largest industrial foreign investment in Portugal , having produced well over two million cars since it opened its doors. In addition to the three MPVs, it was also the production site for the Volkswagen Eos, Scirocco and, more recently, the popular T-Roc.