Detroit - Volkswagen and Ford announced a new alliance on Tuesday, which will see them jointly develop bakkies and vans starting in 2022 in a bid to reduce costs in an increasingly competitive market.
The two auto giants have been talking for more than six months about an alliance, including potential cooperation on autonomous and electrification technologies for cars of the future. But the two sides were able to hash out an agreement only on commercial vehicles in time for an announcement during the Detroit auto show.
The deal does not involve cross-ownership, the companies said in a statement.
Under the alliance, to be governed by a joint committee headed by the chief executives of the two companies, Ford will engineer and build medium-sized bakkies for both firms, which effectively means that the next-generation Amarok will be based on the 2022 Ford Ranger.
The bakkie would be specific to South Africa, Europe and South America, Ford said. It remains to be seen however, whether the Amarok would be built in Ford's South African plant in Silverton, or one of the other Ranger plants.
Ford will also build large commercial vans for European customers and VW will develop a city van for both, likely replacing the Caddy.
Deeper partnership needed
The alliance follows in the footsteps of others formed in the motor industry, which is facing rising costs amid the drive to develop new technologies, as well as changing consumer preferences.
"The industry likely will see more kinds of collaboration like the one announced today by Ford and VW," said analyst Michelle Krebs of Autotrader.
But Edmunds analyst Jessica Caldwell cautioned that VW and Ford would have to forge a deeper partnership if they were to realise the full benefits of an alliance.
"Cutting costs by sharing vehicle architectures and manufacturing facilities is just table stakes in this new world and is a nice place to start," Caldwell said.
"However, the key to success will be if Ford and VW can help each other fend off the upstarts and become leading forces in electric and autonomous vehicle technology."
Talks ongoing
The chief executives of VW and Ford said they were determined to continue talks on expanding their collaboration further to include new technologies and additional vehicle programs.
"How, where and when this might happen, this is what we are currently negotiating with our colleagues at Ford," VW CEO Herbert Diess said in prepared remarks.
Among the discussions, was a potential collaboration in China on electric drivetrains.