Ford’s Foray into Microtransit Proved Valuable

Detroit’s North American International Auto Show (NAIAS) pulled back the curtains for a media preview Monday and Tuesday before it opens its doors to the public next week.

Coming on the heels of CES—the annual technology conference in Las Vegas that has increasingly become the preferred venue for automakers to showcase their latest technology developments—the Detroit auto show is a more car-centric affair. However, as automotive companies strive to be seen as tech companies, there is also plenty of innovation to take in. (More on innovation from Ford’s Marcy Klevorn in a minute.)

This is the last time that NAIAS will be held in January; in 2020, it will move to June, which should allow for more outdoor demonstrations and easier travel. As with the past two years, NAIAS is split into two parts: On the main floor, the usual parade of new vehicles and elaborate displays—heavy on trucks and exotics in 2019, with more fleet vehicles than in past years—and a smaller show on the lower level called AutoMobili-D, which highlights companies working to advance mobility.

Given its smaller size and more modest displays, AutoMobili-D is usually a little quieter than the rest of the show, but this year, it seemed noticeably more so. That might be because the bulk of the mobility-related panels and press conferences were scheduled for later in the week, but the divide between the two parts of NAIAS seemed starker than it needed to be this year.

While it’s impressive to see the concentration of mobility companies and the array of innovations they’re working on, all gathered in a single space, one might argue that integrating a bit more mobility tech into the main show would be beneficial to the industry, since one of its major challenges is gaining consumer trust and acceptance of developments such as self-driving cars.

Perhaps the biggest announcement at NAIAS so far was Tuesday’s news that Ford and Volkswagen have struck a new collaboration to co-develop technology and vehicles. In a press release, Ford characterized the arrangement as “a broad alliance that positions the companies to boost competitiveness and better serve customers in an era of rapid change in the industry.”

No money or ownership stakes will change hands, but the two automakers said they will work together to develop commercial vans and mid-sized pickups, as well as share resources on autonomous vehicles (AVs), electric vehicles, and other technologies meant to shape the future of mobility.

Mobility has spawned multiple big partnerships between carmakers and tech companies, a new path for the traditionally hyper-competitive auto industry. With so much money at stake—and well-resourced players such as Google and Uber fighting to bring self-driving cars to market—some analysts think these kinds of partnerships among car companies will only increase as AVs get closer to reality.

The Ford-VW alliance has been reported as the largest of its kind. Ford said it intends to engineer and build larger commercial vans for European customers, while Volkswagen plans to develop and build a “city van.” Michelle Krebs, an executive analyst for Autotrader, told The Guardian that the alliance comes at a moment when both companies are in flux as they invest billions in new technology, AVs, and mobility services.

“The cost of developing these technologies is high and nobody knows when there will be a payoff,” Krebs said. “It’s all expense and no clear path to profit.”

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