Ford and Volkswagen have officially confirmed a partnership to build their next-generation of vans and utes together. It will also likely spawn future shared products including Volkswagen’s electric MEB platform underneath blue oval-badged cars, autonomous vehicles, and other mobility services.

The announcement was made in Ford’s home town Detroit, ending a week of some big reveals and news from the 2019 Detroit motor show.

"Over time, this alliance will help both companies create value and meet the needs of our customers and society," said Ford CEO Jim Hackett.

"It will not only drive significant efficiencies and help both companies improve their fitness, but also gives us the opportunity to collaborate on shaping the next era of mobility."

Newly appointed Volkswagen CEO Herbert Diess added: "Volkswagen and Ford will harness our collective resources, innovation capabilities and complementary market positions to even better serve millions of customers around the world. At the same time, the alliance will be a cornerstone for our drive to improve competitiveness."

Both company CEOs will head a strategic planning board consisting of senior executives from each brand but there will be no cross-ownership involved in the deal, unlike the Renault-Nissan-Mitsubishi Alliance.

The costs savings from shared planning, development, engineering and production will start to realise in 2023, beginning with a new medium-size pickup to replace the Ford Ranger and Volkswagen Amarok. Sales of both utes combined last year were the greatest in the world at over 1.2 million units.

Ford has confirmed it will head engineering and development of the new ute and Volkswagen will benefit from the brand’s extensive experience and global manufacturing operations – the Ford Ranger shipping to Australia from a plant in Thailand. It will go to market in 2022.

Details are yet to emerge, but the collaboration will allow Ford to consider further options for the new Ranger such as the Amarok’s 3.0-litre V6 turbo diesel engine that currently produces up to 200kW and 580Nm - greater than the Ranger’s newest 2.0-litre twin-turbo diesel that makes 157kW and 500Nm.

The Alliance said during its announcement that the formal agreements will boost competitiveness and “enable both companies to share investments in vehicle architectures that deliver distinct capabilities and technologies.”

Following the launch of the new utes will be a large commercial van developed for Europe and small van developed by Volkswagen, which recently invested over $2 billion to develop its own van platform and manufacturing facility in Europe after severing ties with Mercedes-Benz Commercial.

The future beyond commercial vehicles looks to be strong, with both companies still working through a memorandum of understanding to investigate shared future electric and autonomous vehicle platforms, and Volkswagen today announcing that it's investing over $1 billion in its plant in Chattanooga, Tennessee, to create over 1000 jobs and expand electric vehicle capabilities.

While Ford will underpin most of the Alliance's upcoming commercial vehicles, Volkswagen’s electric vehicle platform will help Ford get a foothold in the European market where movement away from conventional fossil fuel has punished sales.