SpotlightJune2018

By Calli Gregg V olkswagen AG and FordMotor Co., two of the world’s biggest carmakers, have announced that they are exploring a strategic alliance, possibly joining forces for an array of commercial vehicle projects, a move that would enable two of the world’s largest automakers to share the burden of meeting tougher environmental rules. The potential alliance on several projects, including vans and other commercial vehicles, won’t lead to an exchange of equity or cross-ownership stakes for either company at this time. The automakers didn’t provide a timeline for when they hope to formalize this alliance, instead saying they “will provide updates and additional details as talks progress.”

German automakers, agreeing that they would merge their car-sharing businesses back in March of this year.

“Markets and customer demand are changing at an incredible speed,” Thomas Sedran, Volkswagen’s head of strategy, said in a recent statement released. “To adapt to the challenging environment, it is of utmost importance to gain flexibility through alliances.” Traditional carmakers are increasingly making investments in new technologies like autonomous and electric cars, as well as services like vehicle-sharing. However, many tech giants like Google’s parent company, Alphabet and electric carmaker, Tesla, have made major investments in the R&D for electric and driverless cars and continue to have the cash to do so as they have deeper investment pockets with stock market value many times that of Ford and Volkswagen or most other traditional automakers for that matter.

This is not a new concept in the auto industry as many tra- ditional automakers have sought out such alliances.

Most recently with BMW and Daimler, two long-time rival

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SPOTLIGHT ON BUSINESS MAGAZINE • JUNE 2018

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