Volvo and Geely Auto have announced an expansion on their tech-sharing partnership, but have put to bed any plans for a full merger.
Though both firms are owned by Geely Holding Group, the pair had originally announced plans to merge together last year. However, now both Volvo and Geely Auto have said that they’ll remain separate while increasing the level of cooperation.
Both Volvo and Geely Auto have confirmed that the combination of their existing engine operations will be centralised into one standalone company, too. Due to start this year, the firm will provide internal combustion engines, gearboxes and dual-motor hybrid systems for both companies.
The pair already share many platforms and vehicle architectures and even collaborated on the creation of the Polestar and Lynk & Co brands. The pair will work together to expand the latter car firm around the world, too.
Håkan Samuelsson, president and CEO of Volvo Cars, said: “Having evaluated different options to realise value, we concluded jointly that a collaboration model between two standalone companies is the best way to secure continued growth and at the same time achieve technological synergies in many areas. We welcome the opportunity of further and deeper collaboration with Geely Auto.”
The agreement will also see the two companies put a focus on developing and sourcing new technologies, including connectivity and autonomous systems. They will also share and jointly source batteries and electric motors.
An Conghui, president and CEO of Geely Auto, said: “Geely Auto looks forward to partnering more closely with Volvo Cars, achieving significant synergies for our respective businesses. This will enable Geely Auto to accelerate its global expansion, to capitalise on our strengths in China and develop a new generation of world-class new-energy vehicles and associated mobility services.”