Following news of a partnership between Volkswagen and Ford for the co-development of commercial vehicles, both companies have now announced the first formal agreements within a broad alliance that goes towards the development of commercial vans and medium-sized pick-up trucks for global markets.

Ford CEO Jim Hackett said “over time, this alliance will help both companies create value and meet the needs of our customers and society. It will not only drive significant efficiencies and help both companies improve their fitness, but also gives us the opportunity to collaborate on shaping the next era of mobility.”

Both Ford and Volkswagen have well-established nameplates in this segment, where the American marque has the Transit family of vans and the popular Ranger pick-up range, while the German manufacturer has the Transporter, Caddy and Amarok line of vans and pick-up trucks.

The two auto giants stress that the alliance is a partnership that ‘does not involve cross-ownership between the two companies’, and will be governed by a joint committee led by Hackett and Volkswagen CEO Herbert Diess. The committee will also comprise senior executives from both companies.

The companies estimate improvements in their annual pre-tax operating results from 2023 as a result of the commercial van and pick-up truck cooperation, and a memorandum of understanding has also been signed between the two companies to work on collaboration for autonomous vehicles, mobility services and EVs.

Both parties are open to further vehicle programmes in the future, and more details are being worked on, according to both companies. Collectively, light commercial vehicle volumes from both companies totalled approximately 1.2 million units in 2018, and demand for medium sized pick-ups and commercial vans is expected to grow further in the next five years.

This alliance between Ford and Volkswagen will enable both companies to share development costs and leverage upon their respective manufacturing capacities while maintaining distinct brand identities, both companies said. The alliance will see Ford develop and manufacture medium-sized pick-up trucks for both companies to go on sale in 2022 at its soonest, as well as commercial vans for European market, while Volkswagen plans to develop and build a city van for both companies.