Geely Holding and its subsidiary Geely Auto signed a non-binding framework agreement with French automotive giant Renault Group on November 8 regarding the creation of a new company to develop, manufacture and supply best-in-class hybrid powertrains and highly efficient ICE powertrains.
Under the deal, Geely and Renault will hold 50-50 equity stakes in the new entity, which will be a standalone global supplier of propulsion system solutions, producing next-generation hybrid propulsion systems and developing carbon free and low-emission technologies.
At its launch, the new company is expected to supply multiple industrial customers including Renault, Dacia, Geely Auto, Volvo Cars, Lynk & Co., Proton, Nissan and Mitsubishi Motors Company. In the future, the partnership could also offer powertrain technologies to third-party car brands.
The new company is planned to operate 17 powertrain plants in three continents, employing around 19,000 people in total. It will have a combined capacity of over 5 million internal combustion, hybrid and plug-in hybrid engines and transmissions per year, supplying over 130 countries and regions. The new company’s joint product portfolio and regional footprint could offer solutions for 80% of the global ICE market.
Relations between Renault and Geely have been warming up. In May of this year, Geely Auto signed a share subscription agreement with Renault Korea Motors. The move followed a partnership settlement between the two sides in August of last year settling plans to launch high-efficiency, energy-saving fuel and smart hybrid models in the South Korean market in January of this year. According to the plan, the new products adopt Geely Holding’s compact modular architecture platform while leveraging Renault’s strengths in technology, styling design and the user experience. The new cars will be produced at Renault Samsung Motors’ plant in Busan, South Korea, with mass production expected in 2024.
The establishment of this joint venture means that cooperation between Geely and Renault is being further upgraded, and it will also accelerate the implementation of Renault’s “Renaulution” plan and Geely’s transformation into an intelligent electric technology company. In fact, Geely Auto has recently entered into a partnership with Hungary’s Grand Automotive Central Europe (GACE) to enter the EU market.