Ford (F) and Volkswagen (VOW3) have announced an alliance to produce commercial vans and medium-sized pickups for the global markets beginning in 2022.

The automakers said the alliance is part of an effort to remain competitive and better serve their customers. The partnership will enable both Ford and Volkswagen to enhance their scale and efficiencies globally while investing in new vehicle architectures for these markets.

The companies also anticipate that the alliance will allow for “improved annual pre-tax operating results, starting in 2023.”

“Over time, this alliance will help both companies create value and meet the needs of our customers and society,” Ford CEO Jim Hackett said. “It will not only drive significant efficiencies and help both companies improve their fitness, but also gives us the opportunity to collaborate on shaping the next era of mobility.”

As part of the alliance, Ford will engineer and build medium-sized pickups under both brands, which are anticipated to hit the market in 2022. Ford also said it “intends to engineer and build larger commercial vans for European customers.” Volkswagen said it will develop and build a city van.

Ford produces the Transit and Ranger vehicles globally while Volkswagen carries the Transporter, Caddy, and Amarok lines. Together, the two car companies produced 1.2 million light commercial vehicles in 2018 for the worldwide vehicle market.

According to Ford and Volkswagen, the medium pickup and commercial van market are expected to grow over the next five years globally. They will be able to share development cost and leverage manufacturing capacities while increasing competitiveness under two distinct brands.

The medium pickup and commercial van alliance will be overseen by a joint committee including Hackett and Volkswagen CEO Dr. Herbert Diess, as well as other senior executives.

“Volkswagen and Ford will harness our collective resources, innovation capabilities and complementary market positions to even better serve millions of customers around the world,” Diess said. “At the same time, the alliance will be a cornerstone for our drive to improve competitiveness.”

The automakers also said they will share in the development of autonomous vehicles, mobility services, and electric vehicles. They had signed a memorandum or understanding for the venture and have already started to explore opportunities in the sector.

Both companies said “they were open to considering additional vehicle programs in the future” and expressed that they will continue to explore the details of additional programs in the coming months.

As of 1:08 p.m. ET, shares of Ford were down almost 0.12 percent. Shares of Volkswagen gained 0.65 percent.