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Geely and Volvo will share powertrain by merging engine business.

2024-07-18 Update From: AutoBeta autobeta NAV: AutoBeta > Industry Report >

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AutoBeta(AutoBeta.net)10/07 Report--

Geely and Volvo are exploring the possibility of merging their engine businesses, which is still in the planning stage and needs to be implemented after the two sides reach an intention to merge and complete due diligence, Geely Holdings said today.

According to the plan, after the engine business, the partners will establish new powertrain business units, research and development, production powertrain and hybrid power system, and enhance the scale effect in R & D, production, procurement and operation. At the same time, the new business unit will become an independent powertrain supplier and can also supply other vehicle manufacturers.

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The plan will speed up the fully electrified process of Volvo cars, which will still purchase efficient powertrains and hybrid systems from the new business unit. Volvo plans to sell around 2025, accounting for half of all models sold by pure electric vehicles and half by hybrid vehicles.

In addition, the new business unit will focus on superior resources to develop and produce clean and efficient powertrains and hybrid systems, and carry it in its Volvo, Geely, Lecker, Proton, Lutes, London Electric cars and other brands to further enhance the synergy among the brands.

In addition, Volvo and Geely have about 3000 employees engaged in engine development, procurement and manufacturing, respectively, and the planned merger will not affect the existing workforce.

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Geely and Volvo merge their engine business and apply their technology to their brands, much like Volkswagen. Volkswagen Group's Volkswagen, Audi, Skoda and other brands all share the same architecture platform for production, as well as the shared use of engine powertrain.

It is understood that Geely and Volvo intend to integrate resources, the plan is still under discussion, after the plan takes shape, it still needs to be approved by the Volvo union, the boards of directors of both sides and the regulators of the two countries.

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Data show that Geely sold a total of 101223 vehicles (including Lecker) in August, down 19% from a year earlier. Geely sold a total of 844278 vehicles in the first eight months, down 17 per cent from the same period last year and 62 per cent of the target of 1.36 million for the following year. According to the first half of the year, Geely's revenue was 47.56 billion yuan, down 11% from the same period last year, and its net profit was 4 billion yuan, down 40% from the same period last year.

Geely Holdings completed the acquisition of Volvo cars in 2010, and Volvo's global sales also improved. In September, Volvo's global sales reached 64536, up 6.5 per cent from a year earlier. From January to September, Volvo's cumulative global sales reached 507704, up 7.4 per cent from a year earlier.

In the Chinese market, Volvo sold 14920 vehicles in September, up 13 per cent from a year earlier, and sold 109512 vehicles in the first nine months, up 13.8 per cent from a year earlier.

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