Volvo and Parent Geely Seek to End Separate Engine Development

Steph Willems
by Steph Willems
volvo and parent geely seek to end separate engine development

Volvo’s relationship with its Chinese parent is about to grow even closer. The Swedish car maker and its parent company, Geely, proposes to put an end to separate engine development, with engineering teams from both companies tasked with building common powerplants for all marques in Geely’s broad orbit.

For Volvo, the move to a new standalone business for its internal combustion engines would be beneficial, given its plan for the brand’s future.

“The planned new business would represent a significant industrial collaboration between Volvo Cars and Geely with substantial operational, industrial and financial synergies,” the companies said in a release.

Within a handful of years, the automakers envision ICE and hybrid powerplants rolling out of the new company, headed for Geely, Volvo, Proton, Lynk&Co and Lotus models. Volvo Cars, in turn, will dive deep into electrification, offering up fully electric versions of its existing lineup. The first of those vehicles, the XC40 EV, was revealed late last month ahead of a formal introduction in October.

The companies say the new unit will employ “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.” Neither expect any job losses out of the setup.

“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 Volvo Cars CEO Håkan Samuelsson.

The proposal would first have to meet the approval of labor unions, board members, and regulators before being put into effect.

[Image: Volvo Cars]

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15 of 17 comments
  • Dukeisduke Dukeisduke on Oct 07, 2019

    I thought that Volo's plan was to introduce a new EV model per year, and phase out ICE cars in the next few years.

  • Whatnext Whatnext on Oct 07, 2019

    I really liked the Volvo S90 when I saw it at the auto show. Large, spacious and elegant, everything a luxury sedan should be. Then I saw that it was Made in China and it instantly fell off my shopping list.

    • See 5 previous
    • DenverMike DenverMike on Oct 08, 2019

      @Carrera With vehicles, it's not profit margin (or lack of) that sets the retail price. Build quality doesn't necessarily suffer by 3rd World (sweatshop) manufacturing, although any part made of Chinese steel will likely wear out or break sooner.

  • CKNSLS Sierra SLT CKNSLS Sierra SLT on Oct 07, 2019

    (dated 2017) General Motors produces the Buick Envision exclusively at a factory in Shanghai, mainly for the Chinese market. About 32,000 of the vehicles, which sell at a base price of $34,065, have been sold in the US since the company introduced the compact SUV to the US market last summer. If I am not mistaken-this is Buick's biggest selling model in the U.S. And we know other models come from here as well. BTW-Geely is the Chinese automaker who has been saying for sometime they are eventually coming to the U.S. Bottom line-there are already major bucks being spent on Chinese made cars in this market.

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    • Hummer Hummer on Oct 08, 2019

      @CKNSLS Sierra SLT “ Quit twisting my statements around to suit your anti China bias.” What? Is your whole comment sarcasm? Being against a ruthless communist government that is best known for killing dissenters, tracking the lives of everyone, and stealing US secrets and US technology makes one biased? It would be at the benefit of everyone on this earth if every country stopped trade with China and let it collapse, as far as I’m concerned it’s the biggest threat to America and the freedom loving democratic countries around this world. Country of origin should be your first concern buying a vehicle if there are quality vehicles made within your countries borders that suits your needs; particularly when the vehicle you do buy is bought from a 3rd or 2nd world country that directly hurts your own country.

  • Jjf Jjf on Oct 07, 2019

    As a 9 year soon to be ex Volvo owner this wouldn't bother me. Our xc70 needed a new engine at 40K miles so the bar is low as far as I am concerned. We purchased our Swedish made car right after Geely bought them, so it is really Ford managed engineering at its finest. Despite this and other defects my wife was quite a fan of the brand and had no issue buying a made in China car. We planned to replace the car with an XC60 do so right until she actually looked at the car in person. The styling inside and out did not agree with her and we walked out after 5 minutes and never looked back. We ended up with a base BMW X3 and couldn't be happier. Styling, design and engineering matter more than brand identity or where the car is made.

    • Garrett Garrett on Oct 07, 2019

      Different strokes for different folks! We went from a first gen to second gen XC60. Happy with the new one. More power from T6 and 20% observed improvement in MPG. Meanwhile I’ve never gotten to a place where I like the BMW X series. BMW 3 series is fine enough, but from everything I’ve read, the Giulia is a far better car for driving enjoyment.