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VOLKSWAGEN and Ford have announced the first formal agreements in a broad alliance that positions the companies to boost competitiveness and better serve customers in an era of rapid change in the industry.

Volkswagen Chief Executive Herbert Diess and his Ford counterpart Jim Hackett confirmed that the companies intend to develop commercial vans and medium-sized pickups for global markets beginning as early as 2022.

The alliance will drive significant scale and efficiencies and enable both companies to share investments in vehicle architectures that deliver distinct capabilities and technologies.

The companies estimate the commercial van and pickup cooperation will yield improved annual pre-tax operating results, starting in 2023.

In addition, VW and Ford have signed a memorandum of understanding to investigate collaboration on autonomous vehicles, mobility services and electric vehicles and have started to explore opportunities.

Both companies also said they were open to considering additional vehicle programmes in the future. The teams will continue working through details in the coming months.

Ford and VW both have strong commercial van and pickup businesses around the globe, with popular nameplates such as the Ford Transit family and Ranger as well as the VW Transporter, Caddy and Amarok.

The companies’ collective light commercial vehicle volumes from 2018 totalled approximately 1.2 million units globally, which could represent the industry’s highest-volume collaboration as production scales.

Demand for both medium pickups and commercial vans is expected to grow globally in the next five years. The alliance will enable the companies to share development costs, leverage their respective manufacturing capacity, boost the capability and competitiveness of their vehicles and deliver cost efficiencies, while maintaining distinct brand characteristics.

Through the alliance, Ford will engineer and build medium-sized pickups for both companies which are expected to go to market as early as 2022. For both parties, Ford intends to engineer and build larger commercial vans for European customers, and Volkswagen intends to develop and build a city van.

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