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Volkswagen, Ford Form Global Alliance

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Auto giants Volkswagen AG (VKW.L,VLKAF.PK,VOW.BE) and Ford Motor Co. (F) announced the launch of a global alliance to jointly develop commercial vans as well as medium-sized pickups for global markets, beginning as early as 2022. The two automakers will also collaborate on electric vehicles.

For both the companies, Ford will engineer and build medium-sized pickups, and also commercial vans for European customers. Volkswagen plans to develop and build a city van.

The commercial van and pickup cooperation is expected to yield improved annual pre-tax operating results, starting in 2023. Demand for both medium pickups and commercial vans is expected to grow globally in the next five years.

Ford and Volkswagen both have commercial van and pickup businesses around the globe, with nameplates such as the Ford Transit family and Ranger, as well as the Volkswagen Transporter, Caddy and Amarok.

The two companies' collective light commercial vehicle volumes from 2018 totaled about 1.2 million units globally.

The companies expect the alliance to help them share development costs, leverage their respective manufacturing capacity and deliver cost efficiencies, while maintaining distinct brand characteristics.

Volkswagen and Ford also signed a memorandum of understanding to investigate collaboration on autonomous vehicles, mobility services, and electric vehicles.

The automakers also said they were open to considering additional vehicle programs in the future.

The alliance, which does not entail cross-ownership between the two companies, will be governed by a joint committee led by Volkswagen CEO Dr. Herbert Diess and Ford CEO Jim Hackett. It will also include senior executives from both companies.

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