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Two of the world's largest automotive groups, Volkswagen AG and the Ford Motor Company has confirmed that will enter a strategic alliance to develop a range of commercial vehicles. In signing a Memorandum of Understanding, both parties are seeking to strengthen each company's competitiveness.
The agreement is not said to involve equity arrangements or cross-ownership stakes. Instead, the new alliance will explore potential projects across several areas, initially at the prospect of developing a range of commercial vehicles together.
Following the announcement, Jim Farley, Ford's president of Global Markets, said: "Ford is committed to improving our fitness as a business and leveraging adaptive business models - which include working with partners to improve our effectiveness and efficiency."
"This potential alliance with the Volkswagen Group is another example of how we can become more fit as a business, while creating a winning global product portfolio and extending our capabilities."
While it is not yet clear as to the exact direction the alliance will first take, both companies do already have strong commercial vehicle portfolios. "Markets and customer demand are changing at an incredible speed", said Dr Thomas Sedran, Head of Volkswagen Group Strategy. "Both companies have strong and complementary positions in different commercial vehicle segments already. 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 20205. The potential industrial cooperation with Ford is seen as an opportunity to improve competitiveness of both companies globally."
It isn't the first time that the two companies have worked together; previously they joined forces to create a seven-seat MPV that became the Ford Galaxy, SEAT Alhambra and Volkswagen Sharan. More details are expected to emerge as talks between companies explore the route that the new alliance should take.