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Ford - VW Merge???????

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https://www.freep.com/story/money/cars/2018/10/16/ford-volkswagen-partnership/1655475002/

Seems Ford and VW are talking about cooperation in building auto's that are the cornerstone of each company for each other to expand global sales. Seems Trucks / SUVs from Ford to VW and Cars from VW to Ford. Analysts say there is more than just building auto's for each other that a buy out of one by the other or a merge could take VW from #1 in the world to #1 plus alotta space from #2.

Analysts are dumbfounded as to why Ford is not moving forward faster as they all see a big turn down coming in the auto industry. To quote the story:

“Ford can screw around with management layer reductions in North America and partnership in the other three regions instead of being acquired, in a desperate attempt to remain independent, but concurrently, the next auto downturn is coming," said Gabrielsen, an Ann Arbor native who is based in San Jose del Cabo, Mexico. He travels frequently to Detroit, Chicago and Atlanta to meet with clients, primarily U.S.-based global companies. 

"It is just a question of how soon. But, at the pace they are moving, the downturn will hit before they are done restructuring," he said. "A VW-Ford combination would be the undisputed largest automaker in the world, leaving the (now) near-tie with Toyota in the dust."

To quote the news story above:

The Ford-VW numbers are compelling, analysts said again and again.

Gabrielsen noted that in 2017:

  • Ford had 13.9 percent of the market share versus 4.5 percent for VW in North America.
  • VW had 10.6 percent of the market share versus 8.9 percent for Ford in South America
  • VW had 10 percent of the market share versus 3.4 percent for Ford in Asia Pacific.
  • VW had 17 percent of the market share versus 7.5 percent for Ford in Europe.

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If Ford sold VW trucks that Ford builds, all that would do is create another competitor to Ford trucks. Ford excels at truck/SUV building, and wants to get out of cars. I can't see any upside in an involvement for Ford.

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32 minutes ago, balthazar said:

If Ford sold VW trucks that Ford builds, all that would do is create another competitor to Ford trucks. Ford excels at truck/SUV building, and wants to get out of cars. I can't see any upside in an involvement for Ford.

Upside is VW sells Ford Trucks and SUVs. Ford gets VW cars.

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VW has plenty of trucks (up to and including heavy trucks) in Europe and S. American markets now...incl. a Transit competitor--the Crafter (which is based on the Sprinter, I think).   The Anorak is a Ranger competitor, but they don't have anything like the F-series or Super Duty, but those don't have much market outside the US.. 

VW has many, many car brands now, so not sure how Ford would help them, other than more US market exposure and plants. 

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Aside from Trucks for the US, I don't see the advantage for VW here.... and VW could just as easily spin up a new plant in the US for Truck production if they wanted to be in the market that badly... it would cost less than acquiring all of the baggage that comes with everything not called F-series. 

This makes me think that Ford is in a lot more trouble than anyone outside the management suit really knows. 

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11 minutes ago, Drew Dowdell said:

Aside from Trucks for the US, I don't see the advantage for VW here.... and VW could just as easily spin up a new plant in the US for Truck production if they wanted to be in the market that badly... it would cost less than acquiring all of the baggage that comes with everything not called F-series. 

This makes me think that Ford is in a lot more trouble than anyone outside the management suit really knows. 

I don't think it is necessarily just being in the market but being profitable in the market with sales. Like another article I read said, "The two companies are strong in separate markets, and their product portfolios overlap very little. Ford has profitable pickups, while Volkswagen will soon have a lineup of electric vehicles. VW does well in China but is weak in the U.S., while essentially the opposite is true for Ford.

They could rebadge each other's vehicles for whichever market the brand has better equity in. A VW truck wouldn't sell for crap here the same way Ford cars don't sell for crap in China. A VW car branded Ford here will sell better the same way a Ford branded VW would sell better outside of the US. 

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1 minute ago, ccap41 said:

I don't think it is necessarily just being in the market but being profitable in the market with sales. Like another article I read said, "The two companies are strong in separate markets, and their product portfolios overlap very little. Ford has profitable pickups, while Volkswagen will soon have a lineup of electric vehicles. VW does well in China but is weak in the U.S., while essentially the opposite is true for Ford.

They could rebadge each other's vehicles for whichever market the brand has better equity in. A VW truck wouldn't sell for crap here the same way Ford cars don't sell for crap in China. A VW car branded Ford here will sell better the same way a Ford branded VW would sell better outside of the US. 

If looking at just the product portfolios, yes you are correct.  But Ford has a lot of debt baggage.  I see Hyundai/Kia as a better suitor for Ford. Ford has an good presence in Europe and is still well respected there. Hyundai/Kia are not.

I just don't see what's in it for VW.  VW can improve in the US on their own without Ford. The Atlas is about as close as you can get to an Explorer as you'll find without visiting a Ford dealership. The Tiguan is doing well. VW finally has the secret sauce.  If they expand their crossovers a bit more, they can get the sales they need without Ford.  Seeing as they've been bleeding money with fines, they don't need another money pit.

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I agree with Drew, Ford as a subsidiary of Hyundai makes more sense than VW, but it looks like VW is already well down the path to running what is left of the Ford show.

 

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One other aspect w/ overlap is Ford's European operations..they still sell a lot of cars and MPVs in Europe, don't they?  As does VW...

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1 hour ago, ccap41 said:

There's always going to be some overlap in a merger.. That's why they're merging in the first place. 

I think they are just talking about working together and sharing technology right now. However...seeing Achtung rather than Warning light up on the Dashboard of an F150 is really a possibility perhaps.

1 hour ago, ccap41 said:

There's always going to be some overlap in a merger.. That's why they're merging in the first place. 

I wonder how two very, very different styles of management would mesh if they merged. And how the Ford family would react to this.

At any rate, given my feelings about Ford, this pretty much permanently torpedoes my desire to own a GTI. I have wanted one since high school.  

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