BERLIN, June 20 (Xinhua) -- German automotive corporation Volkswagen Group is assessing the possibility of entering into a strategic cooperation with its U.S. rival Ford, the two carmakers announced on Tuesday night U.S. time.

Volkswagen and Ford announced that they are exploring potential projects across a number of areas, including developing a range of commercial vehicles together to better serve the evolving needs of customers.

The companies have started high-level talks and have signed a corresponding memorandum of understanding.

"Markets and customer demand are changing at an incredible speed. Both companies have strong and complementary positions in different commercial vehicle segments already," a statement by Thomas Sedran, head of Volkswagen Group Strategy, read.

Sedran highlighted that the prospect of a Volkswagen-Ford strategic cooperation offered an "opportunity to improve competitiveness of both companies globally." However, the potential alliance would not involve equity arrangements, including cross ownership stakes.

The two companies will provide updates and additional details on the potential strategic alliance as talks progress.

The announcement of talks on Tuesday night came against the backdrop of looming regulatory changes which have led automotive producers to seek new ways to lower the costs of their development and production.

Stricter Carbon Dioxide (CO2) emission limits in the European Union from 2020 onwards in particular are seen as a posing a challenge for the Volkswagen Group which must ensure compliance with the rules across all of its brands.

Volkswagen was recently listed as the world's largest carmaker in terms of sales and revenue during the first quarter of 2018 in a study published by the accounting firm Ernst & Young. In 2017, the Wolfsburg-based Group recorded gross annual revenue of 230 billion euros (266 billion U.S. dollars).