What was a rumor not long ago is sounding more like a reality.
According to Bloomberg, talks between Ford and Volkswagen regarding a potential alliance are proceeding. We heard some whispers earlier in the month about the two automakers talking, but nothing too definitive. However, this latest update not only confirms the two automotive giants are, in fact, talking about an alliance, it now appears autonomous driving technology and even building vehicles for one another are now on the table. Why are they interested in cooperating on self-driving technology? Simple, significant cost sharing. Ford’s CFO Bob Shanks told Bloomberg the talks are open-ended.
“Collaboration isn’t being limited in any way whatsoever, whether it’s different types of technology, product segments or geography,” he said. “We’re having a very broad set of discussions about how we can help each other around the world.”
But why does the world’s largest automaker, VW, want or need to do business with a competitor? Aside from saving billions in expenses, VW is working hard to rehabilitate its image following Dieselgate. Right now, VW is spending billions in penalties for the diesel emissions scandal. That money, simply put, is not available for future technological investment. For its part, Ford is also restructuring itself as it prepares for rapid changes in the industry. Both automakers have something to offer the other. But what’s interesting is that, up until now, VW and Ford only discussed potentially co-developing light commercial vehicles.
Apparently, those talks must have gone well enough for both sides. It’s certainly possible that during the course of those discussions, other topics, including autonomous driving technologies and production, also arose and both companies felt it was worth proceeding. Ford CEO Jim Hackett and his VW counterpart, Herbert Diess, both previously hinted they were open to partnerships with other automakers. For now, nothing is for sure and neither side is talking details. However, don’t be surprised if a major announcement comes sometime in 2019.