Ford Motor Co and Volkswagen AG have signed agreements that expand their global alliance to meet the rapidly evolving needs of their respective customers in Europe and other regions by “leveraging complementary strengths in mid-size pick-up trucks and commercial and electric vehicles”.

The companies expect these agreements to allow them to “more rapidly innovate vehicle offerings, incorporate relevant new technologies, deliver better utility and offer more model choices”.

They will: produce a medium pick-up truck (engineered and built by Ford) for sale by Volkswagen as the Amarok; further strengthen the commercial-vehicle businesses of both companies, initially with a city delivery van based on the latest Caddy model — developed and built by Volkswagen Commercial Vehicles — and later a 1-tonne cargo van created by Ford; and lead to a highly differentiated Ford electric vehicle for Europe based on Volkswagen’s Modular Electric Drive, expanding on Ford’s zero-emission capabilities in Europe.

During the life-cycles of these products, the companies expect to produce up to 8 million of the medium pick-up truck and the commercial vans included in the commercial relationships.

Volkswagen Group CEO Herbert Diess said: “In light of the Covid-19 pandemic and its impact on the global economy, it is now more vital than ever to set up resilient alliances between strong companies.

“This collaboration will efficiently drive down development costs, allowing broader global distribution of electric and commercial vehicles, and enhancing the positions of both companies.”

Ford CEO Jim Hackett said: “This alliance comes at a time of tremendous enthusiasm about the intersection of increasingly intelligent connected vehicles in an ever-smarter world.

“This creates a huge opportunity to innovate and solve many of the world’s transportation challenges and to deliver extraordinary benefits to customers — even as companies need to be selective about how they use their cash.”

Furthermore, both companies will work with Argo AI “to form distinct highly capable autonomous-vehicle businesses based on Argo AI’s self-driving technology” (Volkswagen recently concluded its previously announced investment in Argo AI, the Pittsburgh-based company in which Ford already had ‘ownership and development interests’).