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FROM THE ENGINEERING INDUSTRY
VOLVO CARS AND GEELY TO MERGE COMBUSTION ENGINE OPERA ATIONS
Volvo Cars and Geely are to merge their existing combustion engine operations into a stand-alone business, establishing a new global supplier that will develop next-generation combustion engines and hybrid powertrains, leaving Volvo Cars to focus on the development of its all-electric range of premium cars.
Volvo Cars intends to build an entirely electrified product range by the middle of the next decade, with the expectation that half its global sales will be fully electric and the other half hybrid, supplied by the new unit.
For Geely, the planned new entity means that technologically advanced and efficient combustion engines and hybrid powertrains will be available to Geely Auto, Proton, Lotus, LEVC and LYNK & CO. The planned new stand-alone business can also supply third-party manufacturers, providing possible growth opportunities. The proposed new business will represent a significant industrial collaboration between Volvo Cars and Geely, with substantial operational, industrial and financial synergies. It will also be an attractive employer for approximately 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� No reductions in the workforce are anticipated.
As a first step towards the merger into a combined new stand-alone business, both Volvo Cars and Geely are in the process of carving out their internal combustion engine( ICE) operations into new units within their respective organisations.
Volvo Cars believes the electrification of the automoti�e industry will be a gradual process, with significant ongoing demand for efficient hybrid powertrains alongside fully electric offerings. Håkan
Samuelsson, Volvo Cars’ President and Chief Executive, explains:
‘ Hybrid cars need the best internal combustion engines. This new unit will have the resources, scale and expertise to develop these powertrains cost�efficiently��
The detailed plans of the new business are under development and subject to union negotiations as well as board and relevant authority approvals.
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