Farley: "This potential alliance with the Volkswagen Group is another example of how we can become more fit as a business."
DETROIT -- Volkswagen and Ford are exploring a development and production alliance for commercial vehicles, including vans, and possibly other projects that could strengthen both companies' competitiveness.
Ford, in a statement, said the two automakers have signed a memorandum of understanding allowing them to explore "potential products across a number of areas -- including developing a range of commercial vehicles together to better serve the evolving needs of customers."
The statement said the potential alliance "would not involve equity arrangements, including cross ownership stakes."
Some preliminary talks have already been held, one source told Reuters earlier on Tuesday.
“Ford is committed to improving our fitness as a business and leveraging adaptive business models – which include working with partners to improve our effectiveness and efficiency,” Jim Farley, Ford’s president of Global Markets, said in the statement. “This potential alliance with the Volkswagen Group is another example of how we can become more fit as a business, while creating a winning global product portfolio and extending our capabilities."
Ford is a leader in medium-duty trucks in the United States, and its F-series pickup has been the best-selling U.S. vehicle for decades. The Ford Transit Connect small van and Ford Transit large van also dominate the U.S. market for commercial vans.
VW, which owns the MAN and Scania truck brands in Europe, earlier this year formed a commercial vehicle alliance with Japanese truckmaker Hino Motors, a Toyota affiliate. VW and Hino said they would consider cooperating in areas such as diesel and gasoline-electric hybrid engines, connectivity and self-driving technologies.
VW also has an alliance with Navistar International and has said it is open to buying a majority stake in the U.S. truckmaker.
Thomas Sedran, VW Group's head of strategy, said in the statement: “Markets and customer demand are changing at an incredible speed. Both companies have strong and complementary positions in different commercial vehicle segments already. To adapt to the challenging environment, it is of utmost importance to gain flexibility through alliances. This is a core element of our Volkswagen Group Strategy 2025. The potential industrial cooperation with Ford is seen as an opportunity to improve competitiveness of both companies globally.”
Automakers across the globe are exploring ways to share expenses for developing light commercial vehicles, including electrified models, as cities from Paris to London to Shanghai push for models that will help them improve air quality. The tightening restrictions come at the same time that demand is rising for delivery of goods rising due to increasing popularity of online shopping.
VW had cooperated for years with Daimler to produce vans, but the German peer ended the joint project several years ago.
Eckhard Scholz, the head of VW’s light-commercial vehicle division, told Bloomberg News in October that the company was exploring ways to work together with other manufacturers. Evolving emissions rules were one factor prompting the talks, he said then.