Ford and Volkswagen Announce Alliance; Joint Pickup Project Is a Go

Months of speculation and rumors came to an end in Detroit Tuesday, as auto giants Ford Motor Company and Volkswagen Group officially announced they will take their relationship to the next level.

After signing a Memorandum of Understanding last year, initially to explore joint commercial vehicle production, the two automakers now say their pact will birth a midsize pickup truck for global markets. Volkswagen Ranger, anyone?

The alliance doesn’t end there, but commercial vans and the aforementioned truck are the only joint products the two are willing to confirm at this point. It’s possible the efficiency-seeking companies could broaden their relationship to include electric vehicles, autonomous vehicles, and mobility services.

In a joint release, the automakers stated their intention “to develop commercial vans and medium-sized pickups for global markets beginning as early as 2022.”

Unlike the Renault-Nissan-Mitsubishi Alliance, this tie-up does not involve any cross-ownership between the two companies. Overseeing the partnership will be a joint committee, with VW CEO Herbert Diess and Ford CEO Jim Hackett sitting at the top, surrounded by execs from both companies.

“The alliance will drive significant scale and efficiencies and enable both companies to share investments in vehicle architectures that deliver distinct capabilities and technologies,” the automakers stated. “The companies estimate the commercial van and pickup cooperation will yield improved annual pre-tax operating results, starting in 2023.”

It became clear last fall that Volkswagen was interested in Ford’s pickup prowess, with Diess letting slip that ongoing talks between the two companies encompassed that possibility, as well as others. Indeed, the alliance may very well go in on EVs together, what with VW boasting a versatile electric vehicle architecture, as well as autonomous tech, which Ford has spent years and no shortage of bucks pursuing.

“Both companies also said they were open to considering additional vehicle programs in the future,” the joint statement read.

The timing of the truck production is interesting. Just last week, Road & Track published details on the next-generation Ford Ranger, tentatively due out in 2022. Meanwhile, Volkswagen’s overseas-market Amarok, a body-on-frame midsize pickup produced since 2010, is growing long in the tooth. The automaker registered the Amarok nameplate in the U.S. early last year.

Producing a next-gen Amarok using co-funded Ford bones would save VW money compared to a ground-up redesign, and these days VW is all about slashing costs to fund its EV product wave. That wave gets underway in earnest in the 2020-2022 time frame.

In this relationship, Ford would develop and build the VW-badged trucks. As for the commercial vehicles, Ford is also tasked with developing and building larger vans for the European market, while VW would develop and build a smaller city van. The companies insist the respective models will differ from each other in more ways than just a badge.

In a statement, Hackett said, “Over time, this alliance will help both companies create value and meet the needs of our customers and society. 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 echoed Hackett’s words, calling the alliance “a cornerstone for our drive to improve competitiveness.”

[Image: Ford Motor Company, VW Group]