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Ford and Volkswagen launch global alliance

by Byron Hurd

The two companies will remain independent but will share vehicle architectures.

Volkswagen and Ford announced Tuesday that the companies have formally entered into an agreement to jointly develop both vehicles in existing market segments and future mobility solutions, confirming rumors that have been swirling since late last year.

Neither company will move to take any sort of financial stake in the other initially. The agreement exists solely to mitigate vehicle development costs. The first programs to benefit will be medium-duty trucks and other commercial vehicles in the European market. 

Ford and Volkswagen disclosed previously that they would partner on mobility programs and possibly electrification of future products. The move to jointly develop vehicles in existing segments again raises the specter of consolidation in an industry that is expected to contract in the coming years.

Ford will be responsible for engineering and production of medium-sized pickups for both companies, with the first products of the alliance expected to hit the market as early as 2022, Ford said. Ford will also be responsible for larger commercial vans to be sold in Europe, while Volkswagen will take the lead on smaller vans. 

"The companies estimate the commercial van and pickup cooperation will yield improved annual pre-tax operating results, starting in 2023," Ford said in its official announcement.

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