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Opinion: why the new Ford-Volkswagen alliance makes perfect sense

Autocar logo Autocar 15/01/2019 James Attwood
a car parked in front of a building: Opinion: why the new Ford-Volkswagen alliance makes perfect sense © Autocar Opinion: why the new Ford-Volkswagen alliance makes perfect sense

Editor’s note: The opinions in this article are the author’s, as published by our content partner, and do not represent the views of MSN or Microsoft.

Given that Ford and the Volkswagen Group compete head-to-head in multiple markets around the world, the extensive new partnership between two of the biggest car companies in the world might seem a surprise.

But the deal makes perfect business sense. Despite their individual scale, both have something that the other wants.

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Volkswagen needs Ford’s expertise in commercial vehicles (which was the scope of the initial deal), such as the Transit van and mid-size pick-ups. In particular, the SUV and pick-up focused USA is one of the few markets where Volkswagen isn’t fighting for the top spot.

Led by the Tiguan and Atlas, Volkswagen has made huge strides with its North American SUV line-up in recent years – its sales in the segment were up 112% year-on-year in 2018 – but the firm doesn’t have a pick-up to offer in the market (the European Amarok is simply too small). Even if a VW pick-up developed on a Ford platform only captured a small share of the market, it could still be hugely successful for the firm.

In return, Ford wants the economies of scale of electric car production that the VW Group’s MEB platform is set to offer. The architecture is set to be introduced across the VW Group, and has been designed to be adaptable and configurable for a wide range of models competing in diverse market segments. By potentially basing future EVs off it, Ford could save millions in development costs.

a car parked in front of a building: Opinion: why the new Ford-Volkswagen alliance makes perfect sense © Autocar Opinion: why the new Ford-Volkswagen alliance makes perfect sense Add in the money Volkswagen saves on potential commercial vehicle development, and the two firms suddenly have substantial cash free to invest in future technology such as autonomy and connectivity – and pooling that research could greatly benefit both firms.

The Ford/VW deal reflects the changes that electrification, connectivity and autonomy are having on the industry. Car firms used to developing products alone have been forced to collaborate with all manner of technology firms to gain knowledge in areas they’ve never previously had to worry about. And once car firms are open to such partnerships and alliances, why not expand such new-found collaboration to work with other car firms?

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There are plenty of examples of car firms working together in the past: for example, the BMW Z4 and Toyota Supra only exist because they were developed alongside each other, dramatically reducing the cost of developing relatively niche products. The big difference here is simply one of scale.

Make no mistake: Ford and Volkswagen will remain competitors, and you can bet engineers in Wolfsburg are currently working flat-out to ensure the soon-to-be-launched Golf Mk8 outdoes the new Focus in every way. But working together in a few key areas can ensure both firms stand to gain.


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