A joint venture between Ford and Volkswagen (VW) was announced on Friday. The two well-known automotive companies will be collaborating on their autonomous and electric vehicles and technologies considered critical for the future of the industry.
Billions of dollars worth in investments will call for intellectual property and hardware, among the sections of the two auto companies, to be shared moving forward.
What technologies will the companies be exchanging?
The joint venture aims to cut down developing and manufacturing costs.
Herbert Diess, VW's Chief Executive, said on Friday "Our global alliance is beginning to demonstrate even greater promise, and we are continuing to look at other areas on which we might collaborate."
Ford is looking to build over 600,000 electric vehicles by using VW's parts, which will eventually bring manufacturing costs down for both companies.
Even though the companies will be working closely together and crossing manufacturing paths regularly moving forward, the alliance will not require cross-ownership.
By working closely together, and sharing a pool of knowledge and industry innovation, the auto companies will leverage a clear advantage in the field.
In a nutshell: #VWGroupxFord— Volkswagen Group (@VWGroup) July 12, 2019
👉Expertise: two of the world’s largest automakers
👉We will get the world’s best SDS platform
👉Share R&D costs
👉Accelerate speed to market
👉Working toward autonomous vehicle leadership with @argoai pic.twitter.com/zb7WONRx2J
As Diess said, "In such a competitive environment, it just makes sense to share investments, pool innovation capabilities, and create scale effects that are clearly defined."
If we already take a look at what the automakers combined built in 2018 alone, they produced 18 million vehicles, approximately 20 percent of the global new vehicle market.
Imagine what they will create moving forward by working together.