PALMELA, Portugal - Ford and Volkswagen have agreed to end their joint venture at the AutoEuropa factory in Portugal. The two companies are holding discussions with Pina Moura, Portuguese minister of economy, about giving 100 percent ownership to VW as of 1 January 1999.
The decision means Ford will go its own way in designing and producing its next-generation minivan.
'We've gone to a global product development and manufacturing strategy that wasn't in place when we conceived this operation with VW,' said Peter Watt, spokesman for Ford of Europe. 'Clearly we have the opportunity to develop on our own a minivan/MPV/type product that offers considerable cost and efficiency benefits.'
The AutoEuropa plant, which produces the Ford Galaxy, Volkswagen Sharan and Seat Alhambra minivans, is currently jointly owned by Ford and VW. Despite the planned change in ownership, production of Ford Galaxys will continue there well into the next decade, said Watt.
Both companies decided the change of ownership would be best for the long-term stability of the plant, Watt said. The factory employs 4,000 workers. AutoEuropa built 131,000 vehicles in 1997 and is on target for 140,000 this year.
Production began at AutoEuropa in 1995. From the beginning, VW took the lead in product engineering and development, while Ford was responsible for manufacturing and purchasing. The factory was conceived at a time when carmakers were testing the market potential of minivans in Europe. Now the market has reached maturity, Ford is confident it can recoup the production and development costs of its own future minivan.