Ford And Volkswagen Could Engage In A Wide-Ranging Partnership

Ford and Volkswagen are apparently holding discussions about a wide range of serious partnership options.

In mid-June, the two automotive juggernauts signed a Memorandum of Understanding to explore a strategic alliance and partnerships. Volkswagen’s press release on the matter said that the automakers were exploring synergies in a host of areas and would develop commercial vehicles together.

According to some automotive analysts who recently spoke with the Detroit Free Press, a partnership on commercial vehicles may just be the start of a much stronger and serious relationship between the pair.

Jon Gabrielsen, an independent market economist, claims that Volkswagen and Ford could form a joint venture. This would benefit both companies as Ford is very strong in the United States whereas Volkswagen is weak. Similarly, VW is much stronger than Ford in other key markets, including Asia.

Both automakers freely admitted in June that they wanted to strengthen global competitiveness, but said that no matter what partnerships were formed, they “would not involve equity arrangements, including cross ownership stakes.”

Speaking to a German newspaper in late August, the chairman of the board of management of Volkswagen Commercial Vehicles, Thomas Sedran, said nothing had been set in stone.

“We are currently exploring the possibilities of a collaboration. I am very confident that we will have something more concrete to say about this in the coming months.

“However, nothing definite has been decided yet. Only when this is the case can we think about how we might be able to develop the next generations of models together. Although Volkswagen is the largest car manufacturer in the world, we still don’t have the scale in certain areas to achieve optimal cost positions.”

According to longtime industry analyst John McElroy, all signs point towards the alliance involving more than a partnership on commercial vehicles.

“I think the commercial truck operations were a point of beginning for their discussions and, as they got more and more into it, they probably see a lot more synergies.

“No one is sure of the form it’s going to take but, look, we need a lot of consolidation in the industry. There are too many car companies with too many brands making too many models,” McElroy said.