Ford and VW finalise alliance
Thursday, 11 June 2020
Ford Motor Company and Volkswagen AG have officially signed agreements that expand their global alliance to develop and build midsize pickup trucks and commercial and electric vehicles.
Plans for the agreements were first announced by Ford and Volkswagen last July and will include a 'highly differentiated' Ford electric vehicle for Europe by 2023 that will be built on Volkswagen’s Modular Electric Drive platform that sits under Volkswagen's new ID.3 EV.
Volkswagen will develop and build a small city delivery van based on the latest Caddy for the alliance, while Ford will contribute a 1-tonne cargo van as well as a medium pickup truck that Volkswagen will sell as the new Amarok starting in 2022.
That's right - your next Amarok will definitely be a Ford Ranger underneath. Whether it will be a straight badge-engineering exercise or something with more extensive visual differentiation is still unknown, but given the drive is to reduce costs in both companies commercial operations, it is likely to be the former with the majority of sheet metal shared
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Recent rumours surrounding potential powertrains for the next Ranger suggest a twin-turbo V6 and a 2.3-litre petrol hybrid system will line up alongside the current 2.0-litre turbo-diesel unit, with the 3.2-litre diesel five-cylinder engine being dropped.
“In light of the Covid-19 pandemic and its impacts on the global economy, more than ever it is vital to set up resilient alliances between strong companies,” said Volkswagen Group CEO Dr. Herbert Diess.
“This collaboration will efficiently drive down development costs, allowing broader global distribution of electric and commercial vehicles, and enhance the positions of both companies.”
“This alliance comes at a time of tremendous enthusiasm about the intersection of increasingly intelligent, connected vehicles in an ever-smarter world,” said Ford CEO Jim Hackett.
“This creates a huge opportunity to innovate and solve many of the world’s transportation challenges and deliver extraordinary benefits to customers – even as companies need to be selective about how they use their cash.”
With Ford and Volkswagen both having strong commercial van and pickup businesses around the world - Ford with its Transit van range and Ranger ute and Volkswagen with its Transporter, Crafter and Caddy vans, as well as the Amarok ute - the alliance is expected to both reduce costs and expand sales with the companies expecting to produce up to 8 million units across the combined lifecycles of the vehicles.
“Commercial vehicles are fundamental to Ford today and an area where we will accelerate and grow, and working with Volkswagen on these platforms will provide both of us significant financial advantages in things like engineering, and plants and tooling,” said Jim Farley, Ford chief operating officer.
Farley also revealed that Ford will add battery-electric versions of the Transit and F-150 pick up in the next 24 months independently of the alliance.
As well as the commercial vehicle arrangement, Ford will also use Volkswagen’s MEB EV as a further effort by both companies to fulfil their commitments to the Paris 2015 Agreement.
Ford says it could deliver 600,000 electric vehicles atop the MEB architecture starting in 2023, with the new vehicle - which will be designed and engineered by Ford in Cologne-Merkenich - adding 'another compelling nameplate to its own all-electric Mustang Mach-E, which will be introduced in 2021.'
As a part of the deal Volkswagen has also invested in Argo AI, a company developing self-driving tech that Ford had previously invested in. The two companies have invested US$$7 billion between them in a move that will give each manufacturer the ability to independently integrate the Argo AI's autonomous system into their own vehicles.
Volkswagen says it will give Argo AI access to more than 200 of its employees who have been developing Volkswagen Group's self-driving technology.
While the alliance has sparked much speculation that it could lead to an eventual merger, both companies stress that the alliance does not include any cross-ownership between the companies, and say that both 'will remain competitors in the marketplace.'