Volvo Cars is planning to set
up a new joint venture technology company with Geely Holding, the Chinese car
group, to share existing and future technology, deepen industrial synergies and
provide the economies of scale that will allow them to more rapidly develop
next generation electrified vehicle technology.
According to a Memorandum of
Understanding signed on July 20, 2017, 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. They will also
cooperate more deeply by commonly sourcing components and cutting procurement
Volvo Cars, Geely Auto and LYNK & CO are
controlled by Geely Holding, the Chinese car group. The new joint venture will
be 50/50 owned by Volvo Cars and Geely Holding and be headquartered in China
with a subsidiary in Gothenburg, Sweden.
Separately, it is also
announced that Volvo is to take a significant minority shareholding in LYNK
& CO. This stake reflects the fact that LYNK & CO will benefit from the
use of Volvo technology both now and in the future. LYNK & CO will be
jointly owned by Geely Holding, Geely Auto and Volvo Cars.
“Partnerships to share
know-how and technologies are common practice in the automotive industry. This
is the model we are adopting,” said Håkan Samuelsson, president and chief
executive. “This planned collaboration will strengthen Volvo’s ability to
develop next generation electrified cars,” he said.
Volvo Cars and Geely already
share technology, most notably the Compact Modular Architecture (CMA) which is
being used by Volvo Cars for its soon-to-be-announced smaller range of 40
series cars and by LYNK & CO.
The intellectual property
rights for the technology to be shared will remain with the company that
developed it, but the technology itself will be available for use by Volvo,
Geely Auto and LYNK & CO, via license agreements.
Future modular vehicle
architectures and other technology will be shared and developed based on cost
sharing agreements. The company leading the development will own the technology
and the other group companies will have full access to it through a license,
reducing overall development costs.
It is expected that the collaboration will
extend in future to also cover electrified vehicle components such as battery
cells, e-motors and charging systems in order to maximize synergies across the
Li Shufu, chairman of Geely
Holding said: “We will unlock significant benefits across our portfolio by
sharing both technologies and next-generation vehicle architectures. I am
confident these synergies can be achieved while preserving the separate
identities and strategic autonomy of our different automotive brands.”
Source: Volvo Cars