Explained: Why VW is partnering with Ford on future products like Amarok
Johannesburg - Many South Africans were surprised by the news that the next-generation Volkswagen Amarok is going to be built in South Africa, by Ford at its Silverton plant east of Pretoria.
This is but one of many joint ventures that the two companies are embarking on, as announced last year. While Ford will build the Amarok and Transporter van for VW, using blue oval underpinnings and engines, the German company will in turn produce Ford’s next small van, using hardware from the new Caddy.
And the plot thickens as soon as we start discussing electric cars.
So why are Ford and Volkswagen shacking up?
For starters, it's worth noting that there is no ownership exchange going on here - apart from the joint ventures, the two companies will remain completely independent.
Let’s first take a look at Volkswagen’s side of the story.
Things have changed a lot for this behemoth of a car company since the so-called dieselgate scandal of 2015. Not only did the fallout from that cost VW more than $30 billion (R510bn), while further legal challenges still loom, but the resulting corporate shake-up has inspired the company to invest heavily in electric cars.
And invest heavily, VW has done. The company is spending more than 50 billion euros (R850bn) on battery procurement alone, and a further $7 billion (R119bn) on its new MEB electric car platform, as it ramps up its ambitious plan to produce around 15 million battery cars in the coming decade.
Which brings us neatly to the bargaining chips that are now in place for both companies.
With VW having invested so much in its EV ambitions, there is less money in the kitty for developing replacements for its traditional vehicles. While big sellers like the Golf, Tiguan and Polo all seem secure for the foreseeable future, the new investment direction has put the lower-volume commercial vehicles in jeopardy. In fact, when announcing the Amarok’s production plans, VWCV board chairman Thomas Sedran admitted that were it not for the Ford deal, the company would not have even developed a new Amarok.
Ford, on the other hand, lives and breathes bakkies, and is not doing too badly on the van front either, so it makes perfect sense for VW to outsource some of its commercial vehicles to the Blue Oval.
But there’s something big in it for Ford too.
Although Ford is currently developing a range of large-sized electric vehicles, including the already-revealed Mustang Mach E SUV, it hasn’t developed a compact electric vehicle of the kind that European customers are going to want, and that’s where VW comes in with its MEB platform.
VW's MEB electric vehicle platform, which Ford will use.
In fact, Ford is hoping to sell 600 000 VW-based electric vehicles in Europe between 2023 and 2029, according to Reuters.
"Ford has taken flack for years for not having a robust EV strategy and VW has had its own fair share of challenges, but this can help both companies reinvent themselves as innovative technology leaders," says industry analyst Jessica Caldwell, of Edmunds.com.
Industry experts believe that partnerships like the one between Volkswagen and Ford will become even more common in the future. Renault and Nissan, for instance, have already been joined at the hip for two decades, while Fiat Chrysler and Peugeot parent company PSA recently got engaged.
But where does this leave vehicle enthusiasts?
While in most cases the collaborating car companies will make an effort to ensure that their vehicles look different to their platform partners, both inside and outside, many fear that the unique driving characteristics inherent in different car brands will be lost.
Volkswagen insists that the new Amarok will be “clearly differentiated” from the Ranger, at least when it comes to styling.
But what about the driving experience?
Don’t get me wrong, I think the Ranger is an excellent bakkie, while the Raptor version will turn any dirt road into a playground. But I enjoy driving a VW Amarok because it's the only bakkie on the market that really feels German, in a seat-of-the-pants kind of way. I’m afraid I’m going to miss that with the next one.
But at least there will be another Amarok.