Volvo and Geely to create new venture

Volvo Cars and Geely will merge their existing combustion engine operations into a stand-alone business.

This move is intended 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 it expects half its global sales to be fully electric and the other half hybrid, supplied by the new unit.

For Geely, the planned 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 can also supply third-party manufacturers, providing possible growth opportunities.

The planned new business would represent a significant industrial collaboration between Volvo Cars and Geely, with substantial operational, industrial and financial synergies.

The proposed new business will employ approximately 3,000 employees 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 are anticipated.

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