Ford, Volkswagen Agreement Might Boom The Automobile Market In Future

Feb-2019 | Extense Research | Automobile

Recently, Volkswagen and Ford announced a long-expected plan to manufacture vehicles together. The auto manufacturers said that they have signed a contract to build medium-sized pickups and commercial vans commencing as early as 2022. The companies also decided to “examine” on how they can function jointly to build up next-generation vehicles, like self-driving and electric cars. Both the companies also stated that they were open to considering supplementary vehicle programs in the future. The automobile market is in the race to build new vehicles and technologies. Firms are looking for techniques to empower billions of dollars to spend on development.

Ford has stated it expects to spend up to $11 Billion in restructuring its business in the upcoming years, while Volkswagen has declared that it will invest $50 Billion (€44 Billion) by the end of 2023 on an “electric offensive” to construct self-driving vehicles, electric cars, and other new technology. Jim Hackett—Ford’s CEO—stated, “It is tough to do this alone. All these attempts would be augmented by sharing intelligence.”

While, Volkswagen CEO Herbert Diess said, “It is not hidden that automobile market is going through widespread electrification, fundamental change, many strict emission regulations, shift towards autonomous driving, digitization, and not least varying customer choices. In such surroundings, it makes sense to split pool innovation capabilities, investment, and form scale effects in defined areas.” Hackett said that due to this alliance, both the companies would share some manufacturing prospects and he does not expect any workforce curb in any of Ford’s plants as an outcome of this association. In the last year, Volkswagen sold 10.8 Million vehicles, which makes it one of the largest auto manufacturers in the world. But merely about that sale, 1% is electric vehicles.