Ford, Volkswagen to explore strategic alliance

Volkswagen and Ford have announced the signing of a Memorandum of Understanding to explore a partnership in various areas, including their respective commercial vehicles segments in international markets. The German and American brands hope to leverage each other’s strengths in order to extend their capabilities, be more competitive and better serve their customers.

Both companies have confirmed that the strategic alliance between them would not involve equity arrangements, including cross ownership stakes.

While neither brand has entered the commercial market in India, the MoU could potentially have repercussions across other segments.

While this development will primarily affect international markets, closer to home, our market has not been the kindest to Volkswagen. The German brand is in consolidation mode in India and is not expected to launch any new models here in the near future. It will be sister brand Skoda that will lead product development for both companies and is expected to launch a wave of new models sometime after 2020.

Meanwhile, Ford India has joined hands with Mahindra to co-develop two new SUVs (possibilities include a sub-4m model and a XUV500 replacement) and share EV technology, which may result in a Ford Aspire electric compact sedan.