Volvo Cars And Geely To Merge Their Combustion Engine Operations

Volvo Cars And Geely To Merge Their Combustion Engine Operations

The proposed new business would clear the way for Volvo Cars to focus on the development of its all-electric range of premium cars. By the middle of the next decade the automaker expects half its global sales to be fully electric and the other half hybrid, supplied by the new unit.

Volvo Cars and Geely have announced plans to merge their existing combustion engine operations into a stand-alone business in order to establish a new global supplier that will seek to develop next-generation combustion engines and hybrid powertrains.

The proposed new business would clear the way for Volvo Cars to focus on the development of its all-electric range of premium cars. Volvo Cars is building an entirely electrified product range, as part of the company’s ambition to put sustainability at the core of its operations. By the middle of the next decade the automaker expects half its global sales to be fully electric and the other half hybrid, supplied by the new unit.

For Geely, the new entity means technologically advanced and efficient combustion engines and hybrid powertrains would be available to Geely Auto, Proton, Lotus, LEVC and LYNK & CO. The planned new stand-alone business also will be able to supply third-party manufacturers, providing possible growth opportunities.

Volvo and Geely say the new business would represent a significant industrial collaboration between the two companies, with substantial operational, industrial and financial synergies.

The proposed new business is intended employ 3,000 workers from Volvo Cars and around 5,000 employees from Geely’s combustion engine operations, including research and development, procurement, manufacturing, IT and finance functions. No reductions in the workforce at either business are anticipated.

Both Volvo Cars and Geely are in the process of carving out their internal combustion engine operations into new units within their respective organizations, as a first step toward a merger of the two into a combined new stand-alone business.

Volvo says it believes the electrification of the automotive industry will be a gradual process, meaning there will be significant ongoing demand for efficient hybrid powertrains alongside fully-electric offerings.

“Hybrid cars need the best internal combustion engines. This new unit will have the resources, scale and expertise to develop these powertrains cost efficiently,” said Håkan Samuelsson, Volvo Cars’ president and chief executive.

The detailed plans of the new business are under development and subject to union negotiations as well as board and relevant authority approvals.

You May Also Like

Insights on Mexico Industrial Real Estate

The interview focuses on industrial and commercial real estate in the Bajio and Northeast automotive regions.

GlobalAutoIndustry.com’s latest Audio Interview "Insights on Mexico Industrial Real Estate: Focus on the Bajio and Northeast Automotive Regions – June 2023" features Fernanda Martinez and Edgardo Hernandez, both with NAI Mexico.

Martinez is regional director serving the Bajio Region, and Hernandez is regional director serving the Northeast Region. NAI Mexico, part of the NAI Global network, is an industrial and commercial real estate firm, and operates 25 offices across Mexico and works with global customers, including many in the automotive industry.

Autoliv Names Petra Albuschus EVP, HR and Sustainability

Albuschus will succeed Per Ericson, who will retire.

Volvo to Sell 1,000 Electric Trucks to Holcim

The deal is the largest commercial order to date for Volvo electric trucks.

LIQUI MOLY Releases A/C System Cleaner

The cleaning solution is designed to improve the efficiency and lifespan of HVAC systems.

Cummins to Acquire Portion of Faurecia’s CV Exhaust Business

Cummins will purchase Faurecia’s commercial vehicle manufacturing plants in Columbus, Indiana, and Roermond, Netherlands.

Other Posts

Lear Opening Connection Systems Plant in Morocco 

Opening in Q3 2023, the facility will manufacture injection-molded parts and engineered plastics.

A Look at the NA Commercial Truck Aftermarket in 2023

John Blodgett, VP of sales and marketing with MacKay & Co., answers key questions on this market segment.

Hesai Opens Stuttgart Office to Accelerate Global Expansion

With this strategic move, Hesai says it aims to further tap into the European markets.

US Automakers to Host APEC Meeting in Detroit

The 37th Asia-Pacific Economic Cooperation event will focus on growth and development of EV/EV battery supply chains.