Volkswagen and Ford Move Closer to an Agreement on Autonomy, Electrification, Assembly
Volkswagen AG and Ford Motor Co. continue to become more chummy with each passing day. They may even be on the cusp of sittin’ in a tree, K-I-S-S-I-N-G.
After signing a Memorandum of Understanding in June, executives are now hinting at widespread collaboration. Ford wants help in Europe and Latin America, areas awash in a sea of red. Volkswagen wants a piece of Ford’s self-driving technology, while the pair would work together on electric vehicles, according to recent reports. It’s worth noting that Ford, which has proven more open in discussing the matter, previously said nothing would be off the table if the two joined forces.
The most recent update concerns VW’s proposed investment in Ford’s self-driving partner, Argo AI. While both companies are dead set on a future of “electro mobility,” both fall short in critical areas.
Over the past few years, Ford managed to get quite a bit of autonomous testing under its belt, but it’s not seen as a leader in the field — though how far it actually lags behind General Motors is debatable. Meanwhile, Volkswagen promised widespread electrification by 2022 and expects to build up to three million electric vehicles annually by 2025. Right on cue, supplier issues have cropped up. The Blue Oval’s vision is similar to VW’s — a continued shift towards light trucks, with a flagship EV in the wings and more electrification to follow. But it doesn’t appear as if Ford will have a glut of competitive battery-electric vehicles on the market for some time. Gaining access to Volkswagen Group’s MEB platform could change that… theoretically.
According to Bloomberg, people familiar with the situation claim the two might solidify initial agreements by the end of end of this year or early 2019. VW refused to say what that might entail; Ford said it’s currently in discussion with VW over potential collaborations across multiple areas but that it would be premature to share additional details. Neither has any plan for a cross-shareholding arrangement like Nissan Motor has with Renault.
That’s not much to go on, though Volkswagen CEO Herbert Diess recently confessed to Automotive News that Ford could gain access to the MEB platform and that the Germans could use the Ranger pickup to replace the Amarok on the global market.
Even more rumors include discussions of VW offering the pint-sized Caddy van to Ford in exchange for the Americans building a replacement for the T6 Transporter at its own van plant in Turkey. We probably won’t see the bastard offspring of either arrangement in North America.
On the autonomous side of things, Volkswagen’s investment in Argo would likely mimic Honda’s conditional $2.75 billion investment in General Motors’ Cruise division. Still, with the two companies so wrapped up in everything else, we doubt it would implement the same stipulations that Honda did with GM.
“We’re having a very broad set of discussions about how we can help each other around the world,” Ford CFO Bob Shanks told Bloomberg last month. “Collaboration isn’t being limited in any way whatsoever.”
The marriage makes a lot of sense, honestly. Automakers are terrified that governments, especially those in Europe and China, will prohibit everything that isn’t electric from entering major cities in the coming years. Not having a lineup of vehicles that can adhere to that specific brand of vehicular authoritarianism would be a death sentence for an automaker. Likewise, autonomy is seen as the key for opening up the door to new business opportunities that could be worth trillions in the coming decades.
Now, we’ll just have to see if they can pen an agreement both parties can shake on. It’s looking like they’re already in the home stretch.
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Well, I've been trying to tell everyone that the US manufacturers will be challenged due to the unique regulations, tax structure, etc that has created the US market to become a Jurassic Park. The US large vehicles are nice, but, the US needs to become more competitive and build what the world wants. The US vehicle market is becoming less significant as the economies of production and volume diminishes the "world's most dominant" vehicle market. The US market is big, but the world without the US is 85% of the market. Ford's reliance of F Series sales is ridiculous as the F Series is very protected with huge barriers removing external competition. Ford is not able to compete outside of the US competitively. The idea that the "world is against US vehicle manufacturers because the US is so generous" is ridiculous as well. The reason is the rest of the global manufacturers are able to be more competitive in those global markets, and the US manufacturers seem to be floundering. Maybe the "old school' US business model is becoming defunct and the manufacturers have become totally reliant of protection of the large vehicles. It think we are getting much closer to D Day for the US manufacturers. The US Government needs to come up with a plan to force the US manufactuers to be weaned off of the huge protection offered to pickups and their related SUV station wagons. Ford, you have done this to yourself via poor decision making and management over the past number of decades, like the Aussie manufacturers did (again managed by the US, FoMoCo and GM).
Dont pay him much mind. He's from a land and long line of castoff criminals. Considering his country literally contributes nothing to the rest of the world, the gloating and stuck up attitude is precious. Oh well, changing trends make it hard for companies sometimes, just gotta change to suit the times. Ford will be fine.