Volvo And Geely To Merge Internal Combustion Engine Operations

Volvo Cars and parent company Geely have announced they intend to merge their existing combustion engine operations into a standalone business.

According to the two companies, the move will allow them to establish “a new global supplier that will seek to develop next generation combustion engines and hybrid powertrains.”

This will also help Volvo focus on the development of its all-electric range of premium cars. You may be aware that the Swedish company is building an entirely electrified product range. By 2025, Volvo expects half its global sales to be fully electric and the other half hybrid.

Also read: Volvo’s Electric XC40 SUV Teased In Official Sketches

The hybrid powertrains will be supplied by the new business unit, which will also produce efficient combustion engines for Geely Auto, Proton, Lotus, LEVC, and Lynk & Co. According to the press release, the new standalone business can also supply third party manufacturers.

The proposed new business is expected to employ approximately 3,000 people from Volvo Cars and around 5,000 employees from Geely’s combustion engine operations, including R&D, procurement, manufacturing, IT, and finance functions. No reductions in the workforce are anticipated, the carmakers said.

As a first step towards a merger, both Volvo Cars and Geely are carving out their ICE operations into new units within their respective organizations. “Hybrid cars need the best internal combustion engines. This new unit will have the resources, scale and expertise to develop these powertrains cost efficiently,” said Håkan Samuelsson, Volvo Cars’ president and chief executive.

Detailed plans of the new business are under development and subject to union negotiations as well as board and regulatory approvals.