Ford and Volkswagen van and pickup alliance

The Ford and Volkswagen joint-venture announcement for vans and pickups may have come as a surprise for many, but development sharing is an inevitability as costs rise. At the recent launch of the Transit Custom PHEV in Sweden, we caught up with Mick McDonagh, Ford’s Chief Program Engineer for Transit, to see how the partnership is going.

Due to the increasingly stringent emission and safety regulations placed on manufacturers, research and development (R&D) costs for a European van range between €1bn and €1.5bn; double that of the costs 20 years ago. With the advent of mass electric van sales around the corner – another costly affair for manufacturers – collaboration is inevitable.

These increasing costs have taken their toll on Ford and Volkswagen, the two last independents on the European light commercial vehicle scene. VW’s iconic Caddy and Transporter vans haven’t received a major overhaul since 2003, while Ford’s Transit Custom van inherits most of its floor plan from the V347, introduced in 2006.

Collaboration will allow Ford and Volkswagen to share development costs, leverage manufacturing capacity and increase the competitiveness of their vehicles. Producing 1.2 million LCVs between them in 2018, the partnership has created the largest LCV alliance in Europe.

“Markets and customer demand are changing at an incredible speed. Both companies have strong and complementary positions in different commercial vehicle segments already”, explained Dr. Thomas Sedran, Head of Volkswagen Group Strategy. “To adapt to the challenging environment, it is of utmost importance to gain flexibility through alliances”.

Volkswagen will take the lead on the small vans (VW Caddy and Ford Transit Connect) only; while Ford will lead the medium vans (Ford Transit Custom and VW Transporter), large vans (Ford Transit and VW Crafter) and pickups (Ford Ranger and Volkswagen Amarok). The shared pickup is expected first, in around 2022.  

“At the moment, Volkswagen has seven senior engineers working on the next Transit Custom and Transporter van out of Ford’s Dunton Technical Centre in Essex”, explains Mick. “Obviously, they’re given very restricted access to the building as there’s a lot of stuff we don’t want them getting their eyes on!”.

“There are also VW engineers and product managers working in our facilities in Germany which also develop the Transits and in our Australian division, which heads up the Ranger development. There are also Ford engineers working at the Volkswagen Commercial Vehicles technical centre in Hannover”.

The alliance, which does not entail cross-ownership between the two companies, will be governed by a joint committee. This committee will be led by Jim Hackett (Ford) and Herbert Diess (Volkswagen) and will include senior executives from both companies.