- Volkswagen & Ford to collaborate on the development of autonomous and electric vehicles.
- The two car manufacturers are expected to sign an agreement by the end of June.
- The German carmaker says its deliveries declined by 45.4% in April to 473,500 vehicles.
The Coronavirus pandemic has brought the global auto industry to a near halt. Car manufacturers from across the globe have reported COVID-19 to have weighed on performance in recent months. Despite challenges and delays in other projects due to the ongoing health crisis, however, Volkswagen (ETR: VOW) and Ford Motor (NYSE: F) announced on Friday that the companies plan on teaming up to build electric and autonomous vehicles.
Volkswagen was reported roughly 2% up in premarket trading on Friday.
VW and Ford to sign an agreement by the end of June
As per the sources, the two auto giants are likely to sign an agreement by the end of June. Both companies, the sourced added, recognize that the development of self-driving and battery-powered vehicles will take massive investments, and sharing the expenditure is strategically the right move.
A VW spokesman did not divulge the specifics of the agreement but highlighted that negotiation with Ford is going fairly well. Ford also echoed the same highlighting that the deal is progressing as scheduled and is expected to close in Q2.
Share of Ford Motor are currently around 50% down year to date in the stock market.
Following the successful partnership on self-driving and electric vehicles, the two companies are also seeking to extend the collaboration for mid-size pickups and commercial vehicles. As the Coronavirus wipes global demand for cars and weighs on finances, sharing investments in new technology offers an opportunity to carmakers to combat their financial struggles.
Volkswagen reports a 45.4% decline in deliveries in April
In separate news, Volkswagen Group also announced a massive 45.4% decline in deliveries in April. The group said that it delivered 473,500 vehicles last month. The company further highlighted Western Europe to have taken the lead in decline posting 76.7% lower deliveries in April. It was followed by a 61.5% decline in Central and Eastern Europe.
Volkswagen also saw a 52.8% decline in deliveries in North America while its deliveries in China posted a 1.0% increase in April. From January to April, VW reported a 28.6% decline in deliveries to 2,479,500 vehicles.
At £106 per share, Volkswagen is currently a little under 35% down year to date in the stock market after recovering from £78 per share in March. Owing to the Coronavirus driven downward rally, the German car manufacturer has now lost all of its gains that it posted in 2019.
At the time of writing, VW is valued at £56.34 billion and has a price to earnings ratio of 5.53.