Ford and VW Join Forces in a Plan To Chase Commercial-Vehicle Profits

(Bloomberg) -- Ford Motor Co. and Volkswagen AG have decided to join forces to make small trucks and delivery vans in a play to tap into a lucrative market that each automaker was too small to effectively compete in on their own.

Ford and VW Join Forces in a Plan To Chase Commercial-Vehicle Profits

Their partnership, which they announced Tuesday, won’t produce its first pickup truck until 2022, but Ford and VW hope to be a force once the venture is established. Together they could become the industry’s highest-volume global collaboration in that market, they say. In Europe, the two combined build more light commercial vehicles than PSA Group, Renault-Nissan and Fiat Chrysler, all of which are currently larger, according to data from researcher LMC Automotive.

Unlike the slowing passenger-car market, demand for light commercial vehicles is on the rise. Global output will increase by 12 percent in the next five years, LMC says. The business also commands higher profit margins. Add in the cost savings of working together, and Ford and VW can generate more cash to pour into developing electric vehicles and self-driving cars.

Ford and VW Join Forces in a Plan To Chase Commercial-Vehicle Profits

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