It seems that we might see more collaborations between Geely and Mercedes-Benz parent company Daimler AG. Daimler will supposedly be co-developing the next-generation hybrid engines for Geely in the not so distant future.

Based on a report by Reuters, Daimler said that it will be cooperating with Geely in building new engines for hybrid vehicles. A spokesman for the German auto giant stated that both companies plan to build a highly-efficient modular engine that will be manufactured in Europe and China.

A person close to the matter said that the new modular engine will be used in both Mercedes-Benz and Geely models. Exact details regarding the upcoming engine remain a mystery as it is currently in the early development stages.

While this new development will mean great things for the two companies, not all are enthusiastic about it. Daimler's work council at the company's factory in Untertuerkheim (which specializes in electric and gasoline powertrains) was surprised by the development as they were not aware of it.

“We are speechless. There was not even a discussion about potential alternative manufacturing locations. We have the ability to build four-cylinder engines in Untertuerkheim but there were no talks about it,” said Michael Haeberle, works council chief for Untertuerkheim.

Are Geely and Daimler collaborating on a new engine? image

For reference, this is not the first time Geely and Daimler will be working together. Just last year, Daimler and Geely entered into a 50:50 joint venture to own, develop, and operate the Smart electric vehicle brand on a more global scale. With it, the two companies will share their expertise, engineering, and design philosophies.

In addition, Li Shufu, Chairman of Geely, bought shares in Daimler back in 2018 worth $9 billion – accounting for 9.69% of the company. This makes Shufu the single largest stakeholder in Daimler. In the future, Shufu actually plans to delve further into working with the German auto giant.

With the Chinese automaker already co-developing engines with Volvo, collaborating with Daimler in making engines could prove beneficial for both parties. Not only would this reduce costs, but it will make for additional engine options across a vast range of models for the two automakers.