Volvo Cars and Geely to merge combustion engine operations

This proposed new business would clear the way for Volvo Carsto focus on the development of its all-electric range of premium cars. The company is building an entirely electrified product range, as part of its ambition to put sustainability at the core of its operations. By the middle of the next decade it expects half its global sales to be fully electric and the other half hybrid, supplied by the new unit, a press release reads. 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 planned new stand-alone business can also supply third party manufacturers. The proposed new business will gather about 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. The companies are not expecting any reductions in the workforce related to the merger. The Swedish company believes the electrification of the automotive industry will be a gradual process, meaning there will be significant ongoing demand for efficient hybrid powertrains alongside fully-electric offerings. “Hybrid cars need the best internal combustion engines. This new unit will have the resources, scale and expertise to develop these powertrains cost efficiently,” says Håkan Samuelsson, Volvo Cars’ president and chief executive, in the press release.