Volkswagen AG and Ford Motor Co. announced that they have signed a Memorandum of Understanding and have plans to explore a potential strategic alliance.

Among the areas the two companies are exploring is the potential to develop a range of commercial vehicles together. VW and Ford said any strategic alliance would not involve equity arrangements, including cross ownership stakes. Separately, Volkswagen’s Truck and Bus group recently announced that it will be renaming itself the Traton Group.

“Ford is committed to improving our fitness as a business and leveraging adaptive business models—which include working with partners to improve our effectiveness and efficiency,” said Jim Farley, Ford’s president of global markets. “This potential alliance with the Volkswagen Group is another example of how we can become more fit as a business, while creating a winning global product portfolio and extending our capabilities.

“Markets and customer demand are changing at an incredible speed. Both companies have strong and complementary positions in different commercial vehicle segments already. To adapt to the challenging environment, it is of utmost importance to gain flexibility through alliances,” said Dr. Thomas Sedran, head of Volkswagen Group strategy. “This is a core element of our Volkswagen Group Strategy 2025. The potential industrial cooperation with Ford is seen as an opportunity to improve competitiveness of both companies globally.”