In its efforts to improve its financial efficiency, Ford is looking to deepen partnerships with other automakers globally in order to share capacity for the production and development of vehicles, said Ford executives to Reuters. In terms of expanding product and technology alliances, the Blue Oval is engaged in talks with Volkswagen and Mahindra specifically, the report said.

The American company’s discussions with Volkswagen are focused on the expansion of a commercial vehicle tie-up which was previously announced for the South American and European markets, as well as the co-development of other types of vehicles, according to a VW executive.

Ford and Volkswagen are studying a partnership in Brazil and talks are ‘advancing positively’, said chief executive for Volkswagen in South America, Pablo Di Si, though he does not expect announcements to be made on this matter until 2019, the report said.

An expanded alliance on the commercial vehicles front would grant the Germany automaker access to some of Ford’s most profitable models such as the Transit and the Ranger, while conversely Volkswagen could help Ford make gains in its currently loss-making South American and European markets, sources told Reuters. Volkswagen’s pick-up truck, the Amarok, is made in Pacheco, Argentina and in Hanover, Germany.

Product sharing discussions are also underway between Ford and Mahindra, where the use of the Indian manufacturer as a benchmark in order to reduce supplier costs in the region is being mooted, the report said, adding that the first product to emerge from this venture is likely to debut in 2020.

The two-pronged approach is intended to give Ford a makeover, together with the USD11 billion (RM45.5 billion) restructuring that has been outlined for the next three to five years, said Reuters, the report adding that Ford is in need of improving its profitability because it is investing billions of dollars in EVs and autonomous vehicles, along with a major roll out of products in the coming two years.

Talks of the alliance are going well and hold a lot of promise for Ford, said Hackett, who recently spoke with the chiefs at Volkswagen and Mahindra, without disclosing plant locations or specific deal structures. Fewer model platforms would help Ford reduce the number of plants required, and go towards Ford’s goal of doubling global pre-tax profit margins to 8% by 2020, from 4.3% in the second quarter of 2018.

“Hackett’s job really is to cut the costs. You have this possibility that Hackett can eliminate the USD4.5 billion (RM18.6 billion) of losses in its weaker operations that were there in 2017 and the earnings will shoot up,” said Edgar Wachenheim III, chairman of Greenhaven Associates, which is Ford’s ninth largest investor with nearly 33 million shares in the company as of the end of June this year.

Ford and Volkswagen ‘complement each other really well’, said Ford’s executive vice president in charge of product development Hau Thai-Tang, who sees areas for the two companies to form synergies without clashing with each other. Meanwhile, alliances also give automakers the chance to share costs, said Ford executive vice president Joe Hinrichs.

The Mondeo, S-Max, C-Max and Galaxy are set to be phased out at the end of their respective lifecycles, sources close to Ford told Reuters; this is in line with an earlier report that these models are likely to make way for more profitable crossovers and SUVs. Should the move materialise, there will be job and capacity cuts at the firm’s plants in Valencia, Spain and Saarlouis, Germany.