3 Mar 21

Geely and Volvo: no merger of corporate structures

Both sister companies have established a good relationship but have until now not moved in with each other. The plans were there, but long distance seems to work for the automakers. The good news however, to keep the analogy going, is the announcement of new common project.

Volvo (661K vehicles sold in 2020) and Geely (1.32M vehicles sold in 2020) mentioned a potential merger back in 2020. Fully consolidated operations would give Volve access to public markets and more leverage to deal with the increasing pressure on OEMs on electrification and autonomous.

The preferred solution, now the merger is off the table, is a new JV that will build engines, transmissions systems and petrol-electric hybrid systems. The interesting part of the joint venture is that these parts will be available not only to Volvo’s and Geely’s own brands, but also to other brands, confirming the latest OEM trend whereby manufacturers become “kit” suppliers for other OEMs to build EVs, much alike is the case in the mobile phone world.

Besides the engines and transmissions, the JV will produce next gen tech, such as connectivity and autonomous, and a modular car platform for compact cars

Authored by: Yves Helven