The decision to end the AutoEuropa joint minivan venture in Palmela, Portugal, means the breakup of Ford and Volkswagen is now complete. But did the partnership really end in failure?
As companies grow and evolve, their needs change. So does their choice in partners. In the mid-1980s, soon after Ford and Fiat decided not to merge, Ford and VW became an item. There was talk of broad-based product sharing and even merging of some, if not all, operations. A joint mini-car project was one idea. A minivan was another. Autolatina, a mixing of the companies' South American operations, was established in 1986 and a few years later the joint venture in Palmela was formed.
Autolatina was eventually dissolved as the two companies became independently strong in Brazil and Argentina. Now VW will take over 100 percent of AutoEuropa, continuing to build the current generation of Ford's Passat-based Galaxy minivan. Both VW and Ford versions of the van have been successful. The joint venture gave each company confidence that it could build and sell a minivan on its own in Europe.
Now Ford is moving closer to Peugeot. The pair will team up to build small diesel engines, and other product cooperation is being studied.
Ford and Peugeot have similar cultures. Both are cautious, especially in emerging markets.
The similarities make a series of strategic partnerships possible. But their model lineups are also close, which makes a DaimlerChrysler-style merger unlikely and unwise.
Still, Ford and Peugeot can profit from each other. Ford, for example, can learn from Peugeot's diesel expertise and superlative chassis engineering. PSA can benefit from Ford's financial discipline and organizational strength. That's enough. Long-term commitments are not always necessary.