Volvo Cars and Parent Geely to Merge Combustion Engine Operations

 By Dominic Chopping 
 

STOCKHOLM--Volvo Cars will merge its combustion engine operations with that of its Chinese parent Zhejiang Geely Holding Group Co., allowing it to focus on developing its all-electric cars, the Swedish auto maker said Monday.

Volvo and Geely will merge their existing combustion engine units into a stand-alone business, establishing a new global supplier to develop next-generation combustion engines and hybrid powertrains for use not only in Geely brands Geely Auto, Proton, Lotus, LEVC and LYNK & CO, but also to third-party manufacturers.

Volvo is in the process of developing an all-electric range of cars and it said that by the middle of the next decade it expects half of its global sales to be fully electric and the other half hybrid, supplied by the new unit.

"Hybrid cars need the best internal combustion engines," said Volvo Cars Chief Executive Hakan Samuelsson.

"This new unit will have the resources, scale and expertise to develop these powertrains cost efficiently."

The merger concerns 3,000 Volvo Cars workers and around 5,000 Geely employees and the companies don't expect any cuts to the workforce as a result of the move despite expecting substantial operational, industrial and financial synergies.

Geely bought Volvo Cars from Ford Motor Co. (F) in 2010.

Write to Dominic Chopping at [e-mail]

(END) Dow Jones Newswires

October 07, 2019 07:11 ET (11:11 GMT)

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