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Ford-Volkswagen Alliance Could Be Confirmed Next Week

Stage is set for details to be revealed at Detroit auto show

Stage is set for details to be revealed at Detroit auto show

Ford and Volkswagen will have an international media audience next week at the North American International Auto Show in Detroit, and there is a time slot blocked off Tuesday morning for a major industry announcement.

The question is whether continued talks, said to be going well, will have reached the point needed to use the Detroit stage to announce details of an alliance that would improve the competitiveness of both automakers going forward. Volkswagen’s board meets Friday and could green-light an alliance and approve making it public next week, sources tell Reuters.

Ford and Volkswagen officials have for months been promising further details of their plans to expand their partnership efforts beyond commercial vehicles. We also await further details on the commercial vehicle side that could include pooling efforts in small vans like the Ford Transit and midsize pickups using the Ranger architecture.

The two have been in talks to see how they can pool their resources to reduce the cost of future technologies, especially for electric and autonomous vehicles. VW has a new MEB electric vehicle platform and is further ahead in its ambitious electric vehicle plans than Ford. Both are working on autonomous vehicles, but Ford has the added technology it acquired from Argo AI.

The exercise, which started with collaboration on commercial vehicles, has allowed them to explore possible opportunities to develop or build more vehicles together, everything from small cars to midsize pickups. There are also areas where they could help each other strengthen their presence geographically.

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Many topics have been on the table including joint vehicle development, investing in each other’s electric and autonomous vehicle programs, licensing arrangements, and potentially using each other’s plants. This move would allow the automakers to share capacity, and it could serve as a hedge against trade tariffs.

The two have used language such as alliance or partnership or joint initiatives, always stressing that no equity will be exchanged. No one is buying anyone else—nor is there a merger in the works.

The auto industry has a history of partnerships to develop high-cost technology such as fuel cell powertrains or new transmissions. Engine families are co-developed and shared between competitors, and it is not unusual for one automaker to pay another to make vehicles for them. Recent examples include the collaboration that yielded the BMW Z4 and Toyota Supra; multiple transmissions co-developed by Ford and General Motors; Honda and GM fuel cell systems; and the myriad of partnerships automakers have with companies like Waymo, Uber, and others to develop autonomous vehicles.