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Ford and Volkswagen representatives at Detroit Motor Show

Ford and Volkswagen join forces on electric and driverless cars

Image credit: REUTERS/Ben Klayman

Volkswagen – the world’s largest automaker – is to form a partnership with US-based Ford Motor Co, which will focus on the development of electric and autonomous vehicles.

The partnership will be formally announced at the Detroit Motor Show this week, following months of negotiations, Volkswagen CEO Herbert Diess confirmed.

“We love to work together with the Ford guys,” said Diess, speaking at the trade show. “They are really serious and professional.”

Diess confirmed that Volkswagen will gain access to Ford’s midsized Ranger pickup truck platform, saying that this would allow them to become “very, very competitive together in this segment”.

The alliance – which is likely to prove the largest of its kind in the automotive industry – is also expected to include the two companies pooling resources for the costly development of autonomous vehicles, a Volkswagen investment in Ford, as well as Ford licensing Volkswagen’s MEB platform, its modular platform for electric vehicles which is already in use in Audi, SEAT, Škoda and Volkswagen models. Ford is in the early stages of a multi-billion dollar restructuring, with $15bn (£12bn) earmarked for development of electric and autonomous vehicles in coming years.

In an interview with Bloomberg, Ford CEO Jim Hackett stated that Ford would never leave Europe and “never sell” its brand, although Volkswagen may eventually manufacture Ford-branded cars for the European market.

The companies have confirmed that any expanded partnership will not involve a merger of ownership stakes.

In June 2018, Volkswagen and Ford signed a memorandum of understanding to explore joint projects. The two companies have since been discussing possible collaborations in vans and other commercial vehicles, with automakers forced to reconsider how they will manufacture vehicles for the European, American and Chinese markets amid rising trade tensions.

The partnership is expected to save the partners billions of dollars during a period of sluggish demand in the world’s largest markets, including China. Ford announced this month that it would be cutting thousands of jobs, closing plants, and discontinuing unprofitable models in Europe, with Hackett telling Bloomberg that among other problems, the Brexit vote “hurt” its business in Europe.

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