Ford, VW tipped to announce deeper ties at 2019 Detroit auto show

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Ford and Volkswagen logos

Ford and Volkswagen logos

Evidence is mounting that Ford and the Volkswagen Group could form deeper ties than once imagined.

Both automaker's announced a memorandum of understanding last June to research partnerships and joint-production of vehicles, with commercial vehicles specifically mentioned, but that might have just been the start.

Citing two people familiar with the matter, Reuters reported Wednesday that the two automakers will announce a deeper alliance during the 2019 North American International Auto Show, which starts January 14 in Detroit. The announcement is expected to be limited however, as talks are still ongoing.

VW Group CEO Herbert Diess last month hinted at the possibility of the VW Group sharing some of Ford's spare capacity in the United States following a meeting with White House officials.

Volkswagen Atlas Tanoak concept

Volkswagen Atlas Tanoak concept

His comments have led to rumors of the Volkswagen brand basing a next-generation Amarok mid-size pickup truck on the Ford Ranger and sharing the Ranger's production line at a plant in Michigan. VW hinted at just such a vehicle with the unveiling of the Atlas Tanoak concept in March. The move would allow VW to escape the 25-percent Chicken Tax placed on light truck imports.

In return, Ford could gain access to VW Group platforms for future small cars and electric cars for the European market, which may explain the Blue Oval's announcement Thursday that it plans to scale back operations and cut thousands of jobs at its European facilities. The cuts could also include plant closures, Ford's head of Europe, Steven Armstrong, told Bloomberg.

There are also rumors of the two automakers partnering in the area of self-driving cars. In particular, we could see VW Group invest in autonomous technology startup Argo AI, which already counts Ford as a key investor.

History has shown not all marriages are perfect matches. One of the most recent American-European tie-ups, Daimler-Chrysler, ended miserably. Ford has also had past experiences that could be cause for caution in its Jaguar, Volvo, Aston Martin, and Mazda connections. However, this time at least, both parties are adamant that there won't be any equity tie-ups.

 
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