Collaborations are often done for the sake of strengthening one’s foundation through additional manpower. In this case, Ford and Volkswagen has signed a Memorandum of Understanding last June this year with plans laid off in accordance to their partnership. That said, both brands are set to explore several possible projects ahead.
With Ford facing such challenges, sources tell that this timing is indeed perfect for a potential partnership. Along with Jim Hackett, appointed CEO of Ford last year, marking steps for the radical transformation of the company. Part of that would be the discontinuation of Ford sedan and coupe production in the United States for a push into electric and autonomous vehicles, as expansion for their pickup, crossover, and SUV lineup.
The newly formed alliance is aiming to “better serve the evolving needs of customers” through focusing with co-developing a wide range of commercial vehicles. Although the Detroit Bureau said this partnership would be more beneficial for both brands if they would consider reaching beyond the development of those said commercial vehicles.
That said, both brands could share each of their strengths and assets in maintaining or developing several areas of their business. In this case, VW could benefit from Ford’s strong position in the American Market in terms of their SUV and pickup entries in the segment. Also, Ford could help them regain their image in the United States after the Dieselgate Scandal. Ford, on the other hand, could use some help in strengthening its brand image in Europe, Latin America, and China. As for both, manufacturers could also consider developing a shared platform as part of expanding their vehicle lineup.
Sources tell that Ford and Volkswagen are considering a full-fledged merger or an equity swap, which could form the largest single company in its industry. Although Ford’s head of Communications, Mark Truby, immediately halted the buzz by denying the allegations in considering equity swap or cross-ownership.
Ford president of Global Markets Jim Farley strongly believes that this potential alliance with Volkswagen is one way of showing how they can become as a more fit business establishment. A goal which is set to be achieved through creating a winning global product portfolio and extending their capabilities as a brand. Assessing this partnership is quite too early for now, as time can only tell if rewarding success shall come to both brands.
Sources: Motor1, Detroit Bureau