Ford and VW Partnership Rumors Emerge as Manufacturer Alliances Expand: Report

Are you ready to buy a Vword? Ford and Volkswagen intend to cooperate on commercial vehicles and, allegedly, far more in the future.

Left: Sean Gallup/Getty Images Right: Karen Bleier/AFP/Getty Images

Analysts believe that Ford and Volkswagen's alliance could be on a grander scale than the pair's possible commercial vehicle partnership, and may turn into a merger between the two companies.

Both automakers announced in June that they would evaluate vehicle co-development, starting with commercial vehicles, specifically the next iterations of the Volkswagen Krafter and Ford Transit vans. Detroit Free Press spoke to analysts who believe that more could be in the works, potentially even a merger between the two automakers.

"Ford is already flirting with joint ventures with VW," said economist Jon Gabrielsen, according to DFP. "So, the immediate question before Ford now is, does one do a difficult but orderly marriage now or wait to be forced to do a disorderly fire sale under duress later? I see millimeter steps at a time when they should be taking a massive leap."

"Ford can screw around with management layer reductions in North America and partnership in the other three regions instead of being acquired, in a desperate attempt to remain independent, but concurrently, the next auto downturn is coming," he continued. "It is just a question of how soon. But, at the pace they are moving, the downturn will hit before they are done restructuring."

Analysts cited by DFP also note that gaps in each company's model lineup could be filled by vehicles from the other and that each could lend the other a hand in markets where their partner struggles. Volkswagen Auto Group faced a difficult recovery from its diesel emissions scandal—ongoing in some other Volkswagen Auto Group marques—and has yet to recover U.S. sales volume comparable to even Kia. Ford, on the other hand, is challenged by Europe, Latin America, and Chinese markets, where Volkswagen has few problems. 

"Both companies have strong and complementary positions in different commercial vehicle segments already," stated VW Commercial Vehicles board chairman, Dr. Thomas Sedran, in the automakers' joint press release in June. "To adapt to the challenging environment, it is of utmost importance to gain flexibility through alliances. This is a core element of our Volkswagen Group Strategy 2025. The potential industrial cooperation with Ford is seen as an opportunity to improve the competitiveness of both companies globally."

"I am very confident that we will have something more concrete to say about this in the coming months," Sedran added in an interview with a German publication in August, according to DFP. "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."

Ford also confirmed a strategic partnership with Indian automotive group Mahindra on Wednesday, which will see the two global automakers develop and share connected vehicle solutions for use in their present and future vehicles. The announcement once again shows Ford's willingness to partner with other manufacturers for strategic advantages. The list now includes General Motors, Mahindra, and Volkswagen.

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