Volvo and Geely focuses on powertrain venture after merger talks end

Swedish carmaker Volvo Cars and China’s Geely Automobile will create a standalone operation firm to combine operations and expand cooperation on electric vehicles as opposed to their initial vision of merging as one. 

This new venture aims to unlock greater efficiencies and streamline research and development. 

The new entity will be providing engines, transmissions systems and petrol-electric hybrid systems for use of both companies as well as other automakers. The collaboration will also see these two companies sharing the electric car platforms, and plan for joint procurement to cut purchasing costs. 

Geely will supervise the new powertrain operations through the partnership, while Volvo will remain entirely separate from the process. 

Based on their statement at a joint news conference, they will also focus on creating and sourcing next-generation technologies, from connectivity and self-driving cars to car-sharing and electrification.

In addition, Geely Auto will also tap into Volvo’s sales network to boost growth for their jointly-owned Lynk & Co car brand around the world. With the company pushing back plans to sell cars in Europe, the newcomer to Geely's automotive portfolio remains a China-only affair.

Zhejiang Geely Holding Group, Geely’s Automobile parent company bought Volvo Cars from Ford Motor Co in 2010. It also owns shares in Daimler AG and National carmaker Proton.