Renault Group and Geely have officially entered into a 50/50 joint venture agreement that will see them launch a new powertrain technology company building hybrid powertrains and efficient internal combustion engines.
We have known about the joint venture plans between Renault and Geely since late last year but it is only now that a deal has been struck with each to hold a 50% stake in the joint venture. As previously reported, oil producer Aramco is evaluating a strategic investment in the new company.
An equal number of board members from Renault Group and Geely will lead the direction of the new powertrain company. The two car manufacturers will then transfer intellectual property to operational centers in Madrid, Spain (Renault Group) and Hangzhou Bay, China (Geely) so they can operate autonomously in developing new powertrain technologies.
Read: Aramco Signs Letter Of Intent To Join Geely And Renault’s Powertrain Company
From launch, the new joint venture is expected to supply a plethora of customers including Renault Group, Geely Auto, Volvo Cars, Proton, Nissan, Mitsubishi, and Punch Torino. The joint venture hopes to add third-party car brands and other partners in the future. It believes its product portfolio and regional footprint could offer solutions for 80% of the global ICE and hybrid market.
The new company will include 17 engine plants and 5 research & development centers in 3 continents and employ some 19,000 people. Renault Group and Geely are investing up to €7 billion ($7.71 billion) in the joint venture.
“Facing today’s automotive challenges, no one can claim to have all the solutions, alone,” Renault Group chief executive Luca de Meo said. “Coming up with breakthrough innovations requires to combine expertise and assets. When it comes about the global race for decarbonizing road transports, there is no time to lose, and it will not be business as usual. Today, we are proud to join forces with a great company like Geely to set up a new player, up to the challenge, able to disrupt the game and open the way for ultra-low emissions ICE technologies. I want to thank [founder and chairman of Geely] Eric Li Shufu for his trust: we are now ready to move forward!”
