Volvo Cars and Geely intend to merge their existing combustion engine operations into a single stand-alone business.
Volvo Cars and Geely intend to merge their existing combustion engine operations into a stand-alone business in order to establish a new global supplier that will develop the next generation of combustion engines and hybrid powertrains.
The planned new entity means efficient combustion engines and hybrid powertrains will also be available to Geely, Proton, and Lotus The proposed new business would clear the way for Volvo Cars to focus on the development of its all electric range of premium cars, 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 to be hybrid, supplied by the new business.
For Geely, the planned new entity means technologically-advanced and efficient combustion engines and hybrid powertrains would also be available to Geely Auto, Proton, Lotus, LEVC and Lynk & Co.
The planned new business would represent a significant industrial collaboration between Volvo Cars and Geely with substantial operational, industrial and financial synergies.
Leaving the new firm to develop the next generation of combustion engines and hybrid powertrains will allow Volvo to focus on developing electric vehicles The proposed new business is intended to be an attractive employer for 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.
Both Volvo Cars and Geely are in the process of carving out their internal combustion engine operations into new units within their respective organisations, as a first step towards a merger of the two into a combined new stand-alone business.
The detailed plans of the new business are under development and subject to union negotiations as well as board and relevant authority approvals.