Volvo and Geely to merge combustion engine operations

Volvo and Geely to combine combustion engine production into a single stand-alone business, allowing Volvo to focus on electrification

Volvo engine

Volvo and Geely plan to merge their combustion engine production operations into a single, stand-alone business. The new business will act as the main engine supplier to all the companies currently under Geely ownership – with the exception of Volvo, which will instead focus on the development of its new range of all-electric powertrains.

The new business venture will produce a range of combustion engines and hybrid powertrains for the Geely, Proton, Lotus, LEVC and Lynk & Co brands. Volvo and Geely also plan to supply third party manufacturers with their conventional powertrains.

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Volvo and Geely’s proposed business venture will poach around 3,000 employees from the former brand and 5,000 employees from the latter brand, from sectors such as research and development, manufacturing and finance. The pair also stress that no jobs will be lost during the merger.

Volvo has already begun its shift towards being a purely electric manufacturer. The Swedish company recently teaser its forthcoming, all-electric XC40, which will join the brand’s  XC40 T5 plug-in hybrid in the model’s line-up when it goes on sale in late 2020. By 2025, Volvo anticipates that half of its product line-up will be fully electric.

Hakan Samuelsson, Volvo’s 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.”

What do you make of Volvo and Geely’s latest business venture? Let us know in the comments section below…

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