Volkswagen (VW) and Ford have announced a partnership that could see the carmakers develop electric and self-driving cars together in future.

Both companies said they would co-operate on the development of pick-up trucks and vans initially as the industry moves to innovate and cut costs in a period of uncertainty for the global economy.

Ford said it did not expect its side of the agreement to result in any additional job losses beyond those announced last week in its plan to return to profitability in Europe.

Last month, VW had described a £2.8bn plan to cut costs further as it focuses on the development of electric technology in the wake of the so-called "dieselgate" scandal that has cost Europe's largest carmaker in excess of $30bn (£23.5bn).

To begin with, the partnership would see Ford design and build medium-sized pick-ups for both companies and large vans for Europe.


VW would develop and build smaller vans.

The aim is to have the vehicles ready for sale by 2022.

Unusually, the tie-up will be governed by a joint committee containing top executives from both companies rather than by any cross-ownership structure such as a merger.

VW boss Herbert Diess, who will be on the committee along with his opposite number at Ford Jim Hackett, said they had signed a memorandum of understanding to jointly develop electric and self-driving vehicles but added that the details were still being worked out.

Image: Ford says the partnership does not signal additional job cuts

Technology firms and traditional carmakers are in a race to take the lead on autonomous technology - and several partnerships have already been completed to spread the cost.

They include Honda's tie-up with General Motors and Google becoming bedfellows with Toyota.

The race is taking place against a backdrop of several pressures including the demonisation of diesel, the US/China trade war and the wider slowdown in the world economy - all affecting sales.

In the UK, where Ford employs 13,000 people and has two engine plants, sales and future trade have also taken a knock from Brexit uncertainty.

The partnership was given a soft launch at the Detroit Motor Show in the US, just 24 hours after VW delighted Donald Trump with the announcement of 1,000 new electric vehicle jobs at its plant in Tennessee.

It was unclear whether the site would become a US focal point for a future tie-up with Ford on new technologies.

Mr Deiss told reporters: "How, where and when this might happen, this is what we are currently negotiating with our colleagues at Ford."