Volvo Cars and Geely Auto have agreed on a wide-ranging collaboration that will maximize the strengths of the Swedish and Chinese automotive groups to meet new and evolving industry challenges. The collaboration will aim to deliver synergies in powertrains, including the sharing of electric vehicle architectures and autonomous drive technologies. After a detailed review, Volvo Cars and Geely Auto have concluded they can still maintain their separate corporate structures while securing new growth opportunities in their respective markets.
“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,” said Håkan Samuelsson, President and CEO of Volvo Cars. “We welcome the opportunity of further and deeper collaboration with Geely Auto.”
As part of the announcement, Volvo Cars and Geely Auto have outlined the following objectives.
Joint procurement to cut purchasing costs.
Expanded use of shared modular architectures for electric vehicles.
Enhanced collaboration in autonomous and electric drive technologies.
Lynk & Co to expand globally through the Volvo distribution and service network.
Powertrain operations to be combined under a new company focused on next-generation hybrid systems and internal combustion engines. That company is expected to become operational in 2021.
“Geely Auto looks forward to partnering more closely with Volvo Cars, achieving significant synergies for our respective businesses,” said An Conghui, President and CEO of Geely Auto. “This will enable Geely Auto to accelerate its global expansion, to capitalize on our strengths in China and develop a new generation of world-class new energy vehicles and associated mobility services.”
Volvo Cars and Geely Auto are planning to share and jointly source batteries, electric motors, and other connectivity solutions to generate valuable synergies. For example, both companies will share the new SEA and SPA2 electrical architectures between their brands to facilitate hardware and software development for said modular architectures. Sharing these platforms will open the door for expanding the product portfolios of Volvo Cars, Geely, Lynk & Co, Polestar, and other external partners.
“As shareholders and portfolio-managers of both wholly-owned and listed companies, Geely Holding sees significant benefits from deeper partnerships and alliances whilst maintaining independence,” said Li Shufu, Chairman of Geely Holding, the parent company of Volvo Cars and the largest shareholder in Geely Auto. “We are encouraged by the potential synergies and growth opportunities created by this collaboration, which will create two even stronger globally competitive companies in the rapidly changing world of automotive technology and new mobility services.”