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Ford Volkswagen Agreement

FRANKFURT/DETROIT — Ford Motor Co. and the Volkswagen Group have reached a framework agreement on the sharing of electric and autonomous automotive technologies and have developed their alliance beyond commercial vehicles, a source familiar with the matter said. As part of the deal, Ford will produce a utility car and a mid-size pickup for itself and for Volkswagen, possibly starting in 2022. Ford spokesman Mike Levine said Ford Ranger (the version sold on the international market) will be the base for the pickup, while the pickup will be derived from the U.S. automaker`s Transit Custom van, which is sold in other markets. Initially, the companies agreed to work together on the development of commercial vehicles in January 2019, with plans extended to pick-ups and a Ford EV built last July on the Volkswagen Group`s MEB platform. The two companies signed formal agreements for the partnership and presented all the details of the projects involved. Both Ford and Volkswagen say the deal could result in significant operating savings as early as 2023. Ford and the Volkswagen Group have announced a cooperation agreement for the development of middle-class pickup trucks and pickups. The two automotive giants will also look for ways to work together in the development of electric and autonomous vehicles, with a view to achieving cost savings on both sides. An important part of the agreement will be a Ford EV that will focus on the European market and will arrive by 2023 and will be developed on the Volkswagen Group`s MEB electric architecture.

The Ford machine is “very differentiated” and developed and built on the American company`s European site in Cologne. The alliance will provide both companies with substantial savings and enable them to develop new or discounted offerings in important market segments, with significantly reduced development costs. The cumulative savings from the agreement are estimated to be as high as $1 billion ($773 million). Volkswagen said it would use Ford`s U.S. sites to build certain vehicles for the North American market, and while there may be joint production, Fordhackett stressed that it does not plan to downsize the company following the Ford-VW deal. The agreement calls for Volkswagen to take a stake in a Start-up backed by Ford, which develops autonomous technologies, and ford takes the components of electric cars developed by Volkswagen. Ford will offer the platform that underpins its ranger to help Volkswagen produce a new version of its Amarok pickup. The Amarok will be integrated into the VW range of commercial vehicles from 2022. Ford and VW expect Ford and VW to produce a total of 8 million units of middle-class truck, truck and urban truck over the life of the agreement. Volkswagen has agreed to invest $2.6 billion in cash and other resources in Argo AI, a Ford-backed start-up that works on sensors, software and other technologies to allow cars to drive on their own.

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