Company also details plans to convert two extra German factories to EV production
More details have emerged about the Volkswagen Group’s discussions with Ford, and its upcoming push into the electric vehicle market.
In a press conference after the Volkswagen Group’s most recent board meeting, Herbert Diess told news organisations, including the Detroit Free Press, a merger with Ford has “never” been considered during collaboration discussions between the two automakers.
A statement put out by Volkswagen describes the talks as “progressing positively so far” with “joint development and manufacture of a range of light commercial vehicles [being] the core of the envisaged cooperation”.
Diess also noted the companies are discussing a broader partnership, which could include common platforms outside of the commercial vehicle space.
More concrete details about collaboration between the German and American car makers should become available by the end of the year.
The German automaker was at pains to point out “Ford and Volkswagen will nevertheless remain competitors, as the proposed cooperation does in no way concern commercial, marketing or pricing strategies”.
Above: Volkswagen executives address the media. Herbert Diess is in the centre.
By sharing development costs in certain segments and increasing economies of scale, both automakers hope to realise large savings, which can be used elsewhere.
The Volkswagen Group is investing heavily in electric vehicles after the Dieselgate scandal. In addition to details about its discussions with Ford, the company has confirmed it will be converting two German factories (Emden and Hannover) to produce only EVs from 2022 onwards.
As result of this shake up, production of the Passat will move from Emden to Skoda’s factory in Kvasiny in the Czech Republic, and the company will build a new factory to in Eastern Europe to produce conventionally-powered cars.
Volkswagen China has also been put under the direct control of Diess. Analysts believe this move telegraphs fears the Chinese auto market is about to shrink after many years of 15 per cent annual growth. GM and other automakers have also reduced their forecasts in the world’s largest car market.
On the other side of the fence, Ford is looking to shore up its bottom line as it invests in autonomous driving. Although Ford remains profitable due to strong sales of profitable pickup trucks and large SUVs, it has been losing considerable amounts of money in Europe, South America and China.