Photo: Volvo
A few steps short of a full merger: this is how the latest development involving Swedish carmaker Volvo and Chinese parent company Geely, announced earlier this week, can be described.
It’s been more than a decade now since Ford dropped its control over the European brand in favor of Chinese carmaker Geely. A thriving decade for the Swedes, but also for relatively new owner from Asia.
The two companies are linked together far more than when it comes to corporate structure and have been working together on a number of projects. This interdependency is about to grow even stronger according to this latest development.
The two parties said earlier this week they have agreed on “a wide-ranging collaboration” that covers everything from powertrain production to aftersales but keeps the two entities independent still.
The most important move is the combination of existing powertrain operations into a single, new company expected to become operational later this year. It will be tasked with making internal combustion engines, transmissions, and dual-motor hybrid systems for Volvo and Geely cars, but also other interested partners, if that need arises.
Further down the line, future electric powertrains will make their way into differently-branded cars that share the same electric vehicle architecture. Then comes joint work on autonomous systems and joint procurement of needed parts and services.
Separately, one of Geely’s brainchildren, Lynk & Co, will move to a position of a global brand by taking advantage of Volvo’s distribution and service network.
“Having evaluated different options to realize 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,” Håkan Samuelsson, CEO of Volvo Cars, said in a statement.
The two companies are linked together far more than when it comes to corporate structure and have been working together on a number of projects. This interdependency is about to grow even stronger according to this latest development.
The two parties said earlier this week they have agreed on “a wide-ranging collaboration” that covers everything from powertrain production to aftersales but keeps the two entities independent still.
The most important move is the combination of existing powertrain operations into a single, new company expected to become operational later this year. It will be tasked with making internal combustion engines, transmissions, and dual-motor hybrid systems for Volvo and Geely cars, but also other interested partners, if that need arises.
Further down the line, future electric powertrains will make their way into differently-branded cars that share the same electric vehicle architecture. Then comes joint work on autonomous systems and joint procurement of needed parts and services.
Separately, one of Geely’s brainchildren, Lynk & Co, will move to a position of a global brand by taking advantage of Volvo’s distribution and service network.
“Having evaluated different options to realize 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,” Håkan Samuelsson, CEO of Volvo Cars, said in a statement.
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