PHOTO: Photo Illustration: Ford / Volkswagen / CNN
Now playing
01:51
Ford and Volkswagen partner up
PHOTO: Natalia V. Osipova
Now playing
02:28
Review: The Ghost is more modest and simple, but it's still a Rolls-Royce
PHOTO: BMW
Now playing
03:04
This Mini Cooper is built to race. No, really
The 2021 Jeep® Wrangler Rubicon 392
The 2021 Jeep® Wrangler Rubicon 392
PHOTO: FCA US LLC
Now playing
01:11
See Jeep's most powerful Wrangler ever
PHOTO: Volkswagen
Now playing
00:50
See the Golf R, VW's most powerful Golf ever
PHOTO: JAMES LIPMAN/ SSC North America
Now playing
01:32
Watch this production car break world speed record
PHOTO: Peter Valdes-Dapena/CNN
Now playing
01:01
This is Volkswagen's first electric SUV
PHOTO: Ferrari
Now playing
01:39
Ride along in the latest Ferrari convertible
Nissan Z concept car.
Nissan Z concept car.
PHOTO: Nissan
Now playing
00:54
Nissan gives a glimpse of its first Z car in more than a decade
Now playing
01:06
This new electric car has over 1,000 horsepower
PHOTO: Daniele Iannoccari/Maserati
Now playing
00:51
See Maserati's first supercar in over a decade
Now playing
01:45
This $1.7M RV lets you go off the grid
PHOTO: FCA US LLC
Now playing
01:33
Jeep is reviving a classic. See the new Grand Wagoneer
2021 Ram 1500 TRX front 3/4.
2021 Ram 1500 TRX front 3/4.
PHOTO: FCA US LLC
Now playing
00:57
See Ram's 702hp pickup that's taking on the Ford Raptor
PHOTO: General Motors
Now playing
01:00
Check out Lyriq, the first fully-electric Cadillac
Now playing
01:28
You can't drive this new Lamborghini supercar down your street
(CNN Business) —  

Ford and Volkswagen announced a long-anticipated plan Tuesday to build vehicles together.

The automakers said they have signed an agreement to develop commercial vans and medium-sized pickups beginning as early as 2022.

The companies also agreed to “investigate” how they can work together to develop next generation vehicles, such as electric and self-driving cars.

Both companies also said they were open to considering additional vehicle programs in the future.

The auto industry is racing to develop new technologies and vehicles. Companies are looking for ways to free up billions of dollars to spend on development.

Ford has said it anticipates spending $11 billion restructuring its business in the coming years, while VW has announced that it will spend €44 billion ($50 billion) by 2023 on an “electric offensive” to develop electric cars, self-driving vehicles and other new technology.

“You can’t do this alone,” said Ford CEO Jim Hackett at a joint appearance Tuesday. “All these efforts will be enhanced by sharing brainpower.”

“It is no secret that our industry is undergoing fundamental change, resulting from widespread electrification, ever stricter emission regulation, digitization, the shift towards autonomous driving, and not least changing customer preferences,” said Volkswagen CEO Herbert Diess. “In such an environment, it just makes sense to share investment, pool innovation capabilities and create scale effects in clearly defined areas.”

While the two companies will share some production plans, Hackett said he does not anticipate any work force reduction in any Ford plants as a result of this alliance.

The two companies have been transparent about their talks, which began early last year. The automakers complement each other fairly well.

Volkswagen sold a record 10.8 million vehicles last year, making it one of the largest automakers in the world. But only about 1% of those are electric vehicles.

It does have a strong business in minivans, but not commercial vans or pickups. Ford brings strength in those areas. It also has only a sliver of the US market, the world’s No. 2 car market behind China. VW also owns the luxury car brand Audi, as well as Porsche and Skoda,

Ford is a major player in the US market, second only to GM in terms of sales. But it is not as successful overseas It struggles to make a profit in Europe where VW is dominant. Ford has a very strong lineup of pickup trucks and SUVs. Its F-150 ihas been the best selling US vehicle for more than 40 years. But is essentially dropping traditional sedan sales in the United States in the coming years, while VW is still very strong in sedans.

Both have limitations on how close an alliance they can form. A formal merger was always unlikely, if not impossible, because of the unique nature of each company’s ownership structures.

Two classes of stock at Ford give the descendants of founder Henry Ford effective control of the automaker. His great-grandson, Bill Ford Jr., is the current chairman of the company and it’s clear the Ford family is unwilling to give up that control. Volkswagen has about 20% of its shares owned by the German state of Lower Saxony, where it is based.

Analysts expressed some disappointment during the call because the two sides weren’t ready to announce a more definitive agreement on electric and self-driving cars. The two company chiefs assured them that they are moving in that direction, but that it’s not as simple to work out the details as it appears from the outside.

“It’s hugely complex. It’s really tough job,” said Diess about a decision on electrics and self-driving cars.

“This is a new world in how people work together,” said Hackett. “We fully expect, Herbert and I, for these [talks] to be very successful.”