Ford and Volkswagen have announced they are to work together on developing vans and pickup trucks to try to reduce costs.

The firms have said they will also look at collaborating on electric and self-driving cars, and are "open to considering additional vehicle programs in the future".

Both companies insist the 'alliance' is not a merger, and neither will own each other's shares.

The arrangement will instead be overseen by a joint committee, led by the CEO's of the two companies.

Ford CEO Jim Hackett said: "Over time, this alliance will help both companies create value and meet the needs of our customers and society.

"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."

His Volkswagen counterpart, Dr Herbeit Deiss, added that the arrangement will be a "cornerstone for our drive to improve competitiveness".

The first medium-sized pickups - designed and built by Ford for both companies - covered by the new alliance are expected to go on sale as early as 2022.

Ford will also work on larger commercial vans for European customers, while Volkswagen will focus on building a city van.

Germany-based Volkswagen is the second largest manufacturer of motor vehicles in the world, while US-based Ford is the fifth largest.