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Both companies are considering various options to structure their new business. An agreement could be announced by mid-November, according to these people.
One option could involve Volkswagen taking a stake of up to 50% in Ford's existing driverless car unit. Another could be the creation of a new company that would combine autonomous car manufacturers' units, said the people surveyed. Forming a new company would create a global technology brand and make it easier for both manufacturers to share ownership of new patents and intellectual property and open the door to new partners, officials said.
Earlier this year, Ford and Volkswagen announced they were considering a strategic alliance that would include the development of a range of commercial vehicles, as well as other projects, but these discussions have expanded to a broader discussion of ways to Ford and VW could cooperate on a global scale. I said.
Volkswagen declined to comment.
Ford, in a statement, said the exploration covered "discussions of potential collaborations in a number of areas."
The talks, reported for the first time by the German business daily Handelsblatt, come as traditional automakers are trying to fend off the hardships of Silicon Valley's newcomers seeking to overturn the traditional car market.
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Inc.
which launched its first electric car in 2008, outperformed its rivals Mercedes-Benz, Audi and
BMW
AG
in the United States on the luxury plug-in vehicle market. According to analysts, Waymo of Alphabet Inc. is ahead of many automakers and could master this technology over the next decade.
Faced with these challenges, traditional car manufacturers have sometimes put aside their past rivalries to team up with new competitors.
Ford is investing billions of dollars in its self-driving business to market a fully driverless car by 2021.
In early 2017, the automaker of Dearborn, Michigan, committed $ 1 billion to the Arts AI-based artificial intelligence company, Argo AI, by acquiring a majority stake in the startup. And this summer, Ford has designed a new standalone unit, Ford Autonomous Vehicle LLC, to attract outside investment.
The development of this technology is at the heart of future business models pursued by Ford, such as the call to driving and delivery services using robotic vehicles.
In the United States, the light regulation of autonomous vehicles has allowed Waymo and traditional car manufacturers to perform millions of kilometers of road tests with their autonomous cars. Volkswagen is far behind and is eager to follow Ford's extensive testing program, sources close to the case said.
Volkswagen Chief Executive Herbert Diess is hoping to outline the proposed alliance with Ford at its next regular meeting on 16 November, said the people.
In November, Volkswagen's board of directors is traditionally used to plan long-term investments. In the past, the company has submitted a five-year investment plan. The current plan, which runs until 2022, has provided nearly 40 billion dollars to develop autonomous cars, electric vehicles and new mobility services such as portering and car sharing.
The race to lead these new markets is pushing some manufacturers to restructure their businesses, betting that independent companies could become as important, if not more, than their traditional businesses.
Earlier this year,
General Motors
Co.
has separated its driverless car business into an independent unit, GM Cruise LLC, attracting billions of dollars in new investment from
SoftBank Group
Corp.
and Honda Motor Co. Honda, as part of its investment, plans to co-develop a fully self-sufficient car for mass production with the Detroit automaker.
Volkswagen and Ford account for about one-fifth of all passenger cars sold worldwide. The pooling of resources could give them a strong position in autonomous cars and in new technologies, say analysts.
"We have a lot of discussions about how we can help each other around the world," said Bob Shanks, CFO of Ford last week.
"Collaboration is by no means limited, whether it's technologies, product segments, or different geographies."
Volkswagen has fallen behind its competitors in the development of autonomous cars. The fraud scandal on diesel emissions, which has so far cost more than $ 30 billion in fines, penalties and compensation to consumers, has resulted in the stalled process.
But he has developed a standard electric car technology platform and is producing millions of battery-powered cars over the next five years. Ford should benefit from Volkswagen's expertise in this area.
Frank Witter, chief financial officer of Volkswagen, hinted last week during the release of the third quarter results that the company could open its electric vehicle technology to third parties.
George Galliers, an automotive analyst at Evercore ISI, said that a Volkswagen investment in Ford's autonomous driving business would be a "big win for Ford". Ford would also benefit enormously from Volkswagen's electric vehicle technology, Galliers said.
"Have access to what should be the first and largest dedicated network [battery-electric vehicle] platform of a traditional [manufacturer] could be very beneficial, "he said.
– Mike Colias contributed to this article.
Write to William Boston at [email protected]
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