Volvo Cars to transfer powertrain assets to new JV with Geely
Volvo Cars and its parent company Geely Holding have agreed to create a joint venture called Aurobay for its powertrain operations, as the companies proceed with their earlier announced plans to merge these into a new, stand-alone business.
As part of the creation of Aurobay, Volvo Cars will transfer all assets in its wholly owned subsidiary Powertrain Engineering Sweden, including its Skövde, Sweden-based engine plant, including the related R&D team, along with its engine plant in China and other relevant assets to the joint venture in the coming months.
Volvo Cars has been under the ownership of the Zhejiang Geely Holding since 2010. The creation of the stand-alone joint venture and the transfer of assets allows Volvo Cars to focus fully on the development of its new range of all-electric premium cars in the coming years. The company aims for 50% of its global sales volume to consist of fully electric cars by 2025 while 50%will be hybrids, with powertrains supplied by Aurobay. By 2030, it plans for every car it sells to be pure electric.
Aurobay will be a global supplier of complete powertrain solutions, including next generation combustion engines, transmissions and hybrid solutions. The company will initially be jointly owned by Volvo Cars and Geely Holding.
For Geely Holding, the new entity will benefit from the addition of a strong R&D team and technologically advanced and efficient combustion engines and hybrid powertrains for its portfolio of brands, creating a strong base for substantial operational, industrial and financial synergies.
The new stand-alone business also has the ambition to supply customers outside of the Geely Holding Group, and aims to be a leading player in the supply of high-quality, low emission, cost-efficient powertrain solutions.