A new partnership will deepen the collaboration between Volvo and Geely Cars
Volvo Forms New EV Partnership with Parent Geely
Gothenburg, Sweden – Volvo and its parent company, Geely Holding, are teaming up to start a new technology company. Under the Volvo Geely partnership, the companies will share existing and future technology and further industrial synergies to help develop new electric car technology.
Geely subsidy Lynk & Co is also involved in the partnership. According to a memorandum of understanding the three entities signed , Volvo Cars, Geely Auto and Lynk & Co will “share vehicle architecture and engine technologies via cross licensing arrangements of technologies managed by the new joint venture.”
China-based Geely Holding, a car group, owns Volvo Cars, Geely Auto and Lynk & Co. Volvo Cars and Geely Holding will evenly split ownership of the new entity. It will be headquartered in China. However, a subsidiary will be located in Gothenburg, Sweden, where Volvo is based.
“Partnerships to share know-how and technologies are common practice in the automotive industry. This is the model we are adopting,” said Volvo president and CEO Håkan Samuelsson.
“This planned collaboration will strengthen Volvo’s ability to develop next generation electrified cars.”
Also, the groups entered into an agreement where ownership of Lynk & Co would be split between Geely Holing and Volvo Cars. Geely launched the luxury car brand Lynk & Co in 2016. Its first product is the 01, a crossover based on the Compact Modular Architecture (CMA) platform shared with some Volvo cars.
Lynk & Co plans to use a direct-to-consumer sales model in most markets. The model is uncommon in the United States where most vehicles are purchased at dealerships. However, Tesla has found some success in the U.S. using this sales model.
Geely says these two agreements illustrate a deepening collaboration between Geely and Volvo Cars. Geely Holding purchased the premium car brand Volvo in 2010.
“We will unlock significant benefits across our portfolio by sharing both technologies and next-generation vehicle architectures,” said Geely Holding Chairman Li Shufu.
“I am confident these synergies can be achieved while preserving the separate identities and strategic autonomy of our different automotive brands.”
Strong Performance
News of the joint venture comes as Volvo Cars today reports a strong first-half performance for 2017. Globally, Volvo sold 277,641 units, an 8.2 percent increase compared to the first half of 2016. Further, sales in China were up 27.6 percent.
Earlier in June, Volvo Cars announced that all of its new cars after 2019 will have some form of electric motor.
