Ford and Volkswagen announced they were exploring a strategic alliance earlier this year, and it appears the talks are heating up as Ford CEO Jim Hackett is looking to drive down costs.
According toReuters, which cites Ford execs, the Blue Oval wants to increase profitability by jointly developing vehicles with competitors and producing models in the same factories as rivals.
The talks with Volkswagen initially focused on the possibility of developing a “range of commercial vehicles together” and initial reports suggested the companies were primarily focused on a van partnership. Volkswagen’s Latin America chief executive Pablo Di Si confirmed the discussions are “advancing positively” and might result in a partnership in Brazil.
Reuters also suggests Ford and Volkswagen might pool their resources and combine production in both South America and Europe. Two sources told the publication that Volkswagen could get access to the Ranger pickup and Transit van. If the deal goes through, they could serve as replacements for the Volkswagen Amarok and Transporter respectively.
Ford is also said to be eyeing an expanded partnership with Mahindra. The initial agreement focused on a jointly-developed midsize SUV, which will be built on a Mahindra platform, but now there’s talk of a jointly-developed platform. The first model to ride on the architecture could arrive by 2020.
When the partnership was originally announced earlier this year, Ford and Mahindra said they would also look into the possibility of jointly developing an electric vehicle and a compact SUV. The two are also considering sharing powertrain options, and this could result in Mahindra engines being installed in Ford vehicles.
It remains to see what comes to fruition, but a number of Ford jobs are likely on the line as the automaker is reportedly eyeing plant closures and staff reductions. Even if the talks don’t pan out, the report says Ford Europe is planning to phase out the C-Max, S-Max, Mondeo and Galaxy, which could result in lay offs.