Volkswagen and Ford to work together on commercial vehicles
As expected, Volkswagen and Ford have provided some detail on their long-awaited partnership. Ford will design and build mid-sized pickups for Volkswagen, with the first vehicles ready in 2022. It will also build large commercial vans, while Volkswagen will develop a city van. In addition, the two firms intend to work together on mobility services, EVs and autonomous vehicles. The two corporations will not make equity investments in each other.
The press today commented that the two automotive OEMs will be relying on each other strength with Ford, exiting the sedan business and focusing on the large vehicles that are so popular in the US.
So, the world’s largest automotive OEM, together with Toyota, that sells more than 10m vehicles a year, does not believe it has the scale to finance a comprehensive vehicle portfolio. There is no question that all automotive OEMs are getting ready for the next automotive recession and look to lower their costs. What is striking is that they now need to share development costs around next-gen mobility. We are expecting OEMs to reduce their R&D spend, initially reducing spending with ER&D vendors working on traditional mechanical engineering activities. 2019 should a tough year for ER&D vendors that have not made the transition to new portfolios or that are too automotive-centric.