Geely and Volvo set up a powertrain joint venture called Aurobay

On July 8th Volvo announced that it and parent company Geely Holdings (Geely Holding) had agreed to create a joint venture called Aurobay for the powertrain business. The two companies are pressing ahead with plans announced earlier to merge these businesses into a new independent business.

Volvo said the new company will become a global provider of complete powertrain solutions, including next-generation internal combustion engines, gearboxes and hybrid solutions.

Aurobay will initially be jointly owned by Volvo and Geely Holdings. In the coming months, Volvo will transfer all the assets of its wholly-owned subsidiary Powertrain Engineering Sweden to Aurobay, including its engine plant in Schaefder, Sweden, including its research and development team, its engine plant in China, and other related assets.

Volvo said in a statement that the joint venture and the transfer of assets would allow it to focus on developing new all-electric luxury models over the next few years. By 2025, the company hopes to account for 50 per cent of its global sales of pure electric vehicles and the other 50 per cent of its global sales of hybrid models powered by Aurobay.

For Geely Holdings, the new entity will benefit from a strong R & D team and bring technologically advanced and efficient internal combustion engines and hybrid systems to its brands, creating a strong foundation for operational, industrial and financial synergies.

In addition, the new joint venture also hopes to provide products to customers outside Geely Holdings Group, with the goal of becoming a leader in providing high-quality, low-emission and low-cost powertrain solutions.