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Volvo Cars and Geely to merge their combustion engine operations

8 October 2019

Volvo Cars and Geely announced they intend to merge their existing combustion engine operations into a stand-alone business in order to establish a new global supplier of next generation combustion engines and hybrid powertrains.

The proposed new business would clear the way for Volvo Cars to focus on building an entirely electrified product range and the development of its all-electric premium cars—a strategy announced in 2017. By the middle of the next decade, Volvo Cars expects half its global sales to be fully electric and the other half hybrid, supplied by the new unit.

For Geely, the planned new entity means technologically-advanced and efficient combustion engines and hybrid powertrains would be available to Geely Auto, Proton, Lotus, LEVC and LYNK & CO. The new stand-alone business would also supply third party manufacturers.

The proposed new business would have 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 converting their ICE operations into new units within their respective organizations, 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.

Volvo Cars has been a subsidiary of the Zhejiang Geely Holding of China since 2010.

Source: Volvo Cars