The global alliance between Ford Motor Co. and Volkswagen AG announced plans to strengthen the commercial-vehicles businesses of both companies as early as 2021 with the development of a city delivery van and medium pickup truck.

The alliance said it will develop a city delivery van based on the latest Volkswagen Caddy model, developed and built by Volkswagen Commercial Vehicles and will also later develop a one-ton cargo van created by Ford, according to the companies. There are also plans to produce a medium pickup truck engineered and built by Ford, for sale by Volkswagen as the Volkswagen Amarok starting in 2022 within the Volkswagen Commercial Vehicles lineup.

“Commercial vehicles are fundamental to Ford today and an area where we will accelerate and grow, and working with Volkswagen on these platforms will provide both of us significant financial advantages in things like engineering, and plants and tooling,” said Jim Farley, Ford chief operating officer. “Separately, Ford will add battery electric versions of Transit and F-150 in the next 24 months for commercial customers who increasingly need zero emissions and the power of connectivity, data and artificial intelligence.”

Plans were also announced to develop a new Ford electric vehicle for the European market by 2023 built on Volkswagen’s Modular Electric Drive (MEB).

“The collaboration with Ford is a key building block of our GRIP 2025+ strategy and part of the current transformation of Volkswagen Commercial Vehicles,” said Thomas Sedran, chairman of the board of management of Volkswagen Commercial Vehicles. “This long-term cooperation with Ford will strengthen our very good position in area of light commercial vehicles, especially in our core European markets, and is proof that we are successfully implementing our plan step by step.”

The companies said they anticipate continued growth in global industry demand for commercial vehicles and for high-performing electric vehicles to add valuable scale to their individual product portfolios.

“This alliance comes at a time of tremendous enthusiasm about the intersection of increasingly intelligent, connected vehicles in an ever-smarter world,” said Ford CEO Jim Hackett.  “This creates a huge opportunity to innovate and solve many of the world’s transportation challenges and deliver extraordinary benefits to customers – even as companies need to be selective about how they use their cash.”

During the lifecycles of the products, the companies expect to produce up to a combined 8 million of the medium pickup truck and both commercial vans included in the commercial relationships.

Additionally, the companies will both work on Ford’s Argo AI autonomous vehicle platform to form an autonomous-vehicle business based on its self-driving technology. 

The Volkswagen/Ford alliance does not include cross-ownership between the companies, which will remain competitors in the marketplace.