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VW Board to Mull Broader Ford Tie-Up Before Detroit Auto Show

Christoph Rauwald and Keith Naughton
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VW Board to Mull Broader Ford Tie-Up Before Detroit Auto Show

(Bloomberg) -- Volkswagen AG is considering taking the next step in a broader alliance with Ford Motor Co., as the world’s largest automaker seeks to position itself for the fundamental shifts sweeping the auto industry.

The talks with Ford are progressing, and VW’s board is scheduled to discuss green-lighting the cooperation on Friday, according to people familiar with the matter. If it’s approved, the companies will make an announcement Tuesday at the North American International Auto Show in Detroit, said the people, who asked not to be identified because the details aren’t final.

The two companies’ memorandum of understanding spans potential collaborations across a number of areas, and it’s premature to share additional details at this time, said Jennifer Flake, a Ford spokeswoman. Mark Clothier, a spokesman for VW, declined to comment.

VW and Ford executives have acknowledged discussions to expand cooperation beyond light commercial vehicles. The pact, which could include joint production and sharing electric-vehicle and autonomous-driving technology, would be the latest sign of how the shift to battery-powered cars and the advent of ride-hailing and other mobility services is reshaping the traditional auto industry.

China Chargers

Alongside the Ford talks, Volkswagen is setting up a network of fast-charging stations in China with local partners as it pushes deeper into infrastructure to make its multibillion-dollar investment in electric vehicles pay off, people familiar with those talks said.

Volkswagen and long-standing carmaker partner China FAW Group Co. will each own 30 percent of the venture operating charging facilities nationwide, said the people, who asked not to be named as the discussions are private. Two other Chinese companies will hold the rest, the people said.

Talks for the venture are near completion and it is scheduled to be set up in the first half of this year, the people said. SAIC Motor Corp., another VW partner, is ready to get on board, with more Chinese auto and battery makers expected to join in future, the people said.

Volkswagen shares fell 1 percent to 145 euros at in 9:32 a.m. in Frankfurt. The stock is down 18 percent in the past year.

Spending Push

Global manufacturers such as Volkswagen and Ford are shifting their focus to electric cars as waning sales of gas guzzlers led to the first full-year slump in China’s auto market in at least two decades. While electric vehicles currently account for a small share of total car sales in the world’s largest auto market, growth rates are impressive. China is targeting sales of 2 million so-called New Energy Vehicles in 2020 as part of a push to clean its air and reduce dependence on imported oil.

Volkswagen has allotted 44 billion euros ($50 billion) over the next five years to invest in next-generation auto technologies, highlighting the huge stakes in moving from the combustion era into a self-driving, electric era.

Reuters first reported on Wednesday that VW and Ford will unveil a deeper alliance during the Detroit show.

--With assistance from Gabrielle Coppola.

To contact the reporters on this story: Christoph Rauwald in Frankfurt at crauwald@bloomberg.net;Keith Naughton in Southfield, Michigan at knaughton3@bloomberg.net

To contact the editors responsible for this story: Craig Trudell at ctrudell1@bloomberg.net, ;Anthony Palazzo at apalazzo@bloomberg.net, Chris Reiter, Tara Patel

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