Volkswagen Buys ‘Trump Insurance Policy’ By Teaming Up With Ford

U.S. President Donald Trump’s trade war with some of the country’s biggest importers and exporters is wreaking havoc in a number of industries. One of those is the car industry, with the president repeatedly saying “we’re going to tax all those wonderful BMWs.”

With the increased tax being placed on imported cars coming into the United States, Volkswagen has seemingly come up with a plan to not be so drastically affected by the increase in tax, according to a report by Bloomberg. The German car company, which owns a number of other car brands including the likes of Audi, Lamborghini, and Porsche, has just announced a partnership with Ford.

Although it is not a full merger, the partnership will see the two companies joining forces when it comes to their production of pickup trucks and commercial fans. They have also spoken about the possibility of future collaborations with regards to the production of electric and autonomous vehicles. Volkswagen and Ford unveiled this new plan on Tuesday in Detroit.

The late Fiat boss Sergio Marchionne would have loved the move, given that he always spoke about how ridiculous he believes it is for “dozens of international carmakers to spend billions of dollars developing similar technologies that consumers struggle to tell apart.”

“It is no secret that our industry is undergoing fundamental change, resulting from widespread electrification, ever stricter emission regulation, digitization, the shift towards autonomous driving, and not least the changing customer preferences,” Volkswagen Chief Executive Herbert Diess said when explaining the collaboration with Ford, according to Reuters.

“Carmakers around the globe therefore are investing heavily to align their portfolios to future needs and accelerate their innovation cycles,” he added.

“In such an environment, it just makes sense to share investment.”

The two car companies from opposite sides of the pond will start the production of their joint vehicles in 2022, meaning they will likely only start reaping the benefits of their partnership by 2023. The proposal so far seems to place the building site for these vans and pickups in Ford’s Turkey factory.

Reuters reports that the partnership will be run by a committee that will include both manufacturers’ CEOs.

Both Volkswagen and Ford feel that the alliance, which has been months in the works, is vital for the two companies to survive the decline in the industry, strengthening their position while also lessening each company’s workload with regards to the development of new technologies.