In news this month, 2 of the world’s largest automaker are to form an alliance with the prime aim being the development of electric and autonomous vehicles. Ford and Volkswagen have officially confirmed the first details of their broad ‘global partnership’, which will begin with the two Giants, pairing up to deliver commercial vehicles in the near future. In addition, the two have also signed a MoU (memorandum of understanding) to “investigate collaboration” on autonomous/electric vehicles and mobility services, as well as other “additional vehicle programmes” in the future as they stated. In August Ford quietly set up its own Autonomous Vehicles stand alone business as FORD CEO, Jim Hackett was quoted saying “As expected and intended, we’re receiving significant interest from potential partners and financial investors,”.
However, they have now moved a step further by announcing their partnership at the Detroit Motor Show this week, following months of negotiations, as Volkswagen CEO Herbert Diess confirmed. “We love to work together with the Ford guys, they are really serious and professional.”
It is also worth noting that Diess was tremendously excited about the partnership and believed that by Volkswagen gaining access to Ford’s midsized Ranger pickup truck platform, it would allow them to become “very, very competitive together in this segment”. By working together on models in a crucial sector for both companies (Ford and Volkswagen sold a combined total of 1.2m commercial vehicles in 2018 alone), it’s expected that the alliance will bring “significant scale and efficiencies” and crate a new “Megaplayer” in the industry”. It is also expected to include that Ford licensing Volkswagen’s MEB platform, its modular platform for electric vehicles which is already in use in Audi, SEAT, Škoda and Volkswagen models
The alliance – which is likely to prove the largest of its kind in the automotive industry – is anticipated to include the two companies expertise, knowledge and pooling resources for the costly development of self-driving vehicles. Ford, has already announced that a restructure worth over $11 billion in the next 3 to 5 years in order to focus on the research and creation of new technologies and reshape the focus of the company which consequently means that potentially Volkswagen will also be “sharing” that cost, a factor crucial to the pans’ success. Finding someone to share those kinds of costs with will be crucial to its success. a Volkswagen investment in Ford, as well as . 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.
All future Volkswagen EVs will be based on the company's MEB platform
In an Bloomberg interview, 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 alliance is not the first to be seen in the industry as last year, Honda invested £2.1 billion in General Motors’ self-driving division as the 2 companies have major plans underway to challenge tech giants Apple and Google with a new range of driverless taxis in the near future. It is a common narrative nowadays that many of the largest “automakers” worldwide are beginning to shift their focus entirely to researching and developing zero-emissions and self-driving vehicles as global legislation aims to reduce pollution.
Ford, BMW, Daimler and Volkswagen, are also co-owners of the Ionity scheme, which is developing a network of ultra-fast charging stations across Europe.
The partnership is highly awaited by industry and other experts and is hopefully a sign of better days for the industry during a period of decreased demand globally (and particularly in China) as markets have slumped due to a variety of political and economic reasons. Ford announced earlier this year that it would be cutting thousands of jobs in a turnaround plan as reported by the BBC, closing plants, and discontinuing unprofitable models in Europe, with Hackett telling Bloomberg that among other problems, the Brexit vote “hurt” its business in Europe.
It remains to be seen how this will affect their overall operations in the UK and what part of their new partnership will be performed here or in the US.
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