It's no secret that Chinese auto giant Geely has been the owner of Volvo since 2010. While some viewed this as Volvo becoming just another Chinese-owned subsidiary, Geely actually allowed Volvo to do their own thing which involved refocusing its product lineup.

Under Geely's ownership, Volvo has developed a new line of three-cylinder and four-cylinder turbocharged gasoline and diesel engines. The Swedish automaker even made twin-charged engines (both turbocharged and supercharged), as well as plug-in hybrid (PHEV) versions that allowed Volvo vehicles to run cleaner and emit less carbon emissions.

Now, Geely and Volvo Cars are looking to combine their engine operations into a stand-alone business. Their goal, to establish a new global supplier that will develop next-generation combustion engines and hybrid powertrains. In addition, the new business entity may also see Volvo and Geely supply engines to other manufacturers in the future.

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With it, Volvo Cars plans to build an electrified product range as part of the company's ambition to put sustainability at the core of its operations. Volvo predicts that in the future, half of its global sales will come from fully-electric models while the other half will come from hybrids.

As for Geely, the planned stand-alone business will see the development and advancement of efficient combustion engines and hybrid powertrains. In addition, these would all be available to Geely Auto, Proton, Lotus, LEVC, and even Lynk & Co.

The new stand-alone business could see the employment of 3,000 individuals from Volvo Cars and around 5,000 employees from Geely's combustion engine operations. Workers from Geely's research and development, procurement, manufacturing, IT, as well from their financial could also be employed in the new engine operations merger.

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“Hybrid cars need the best internal combustion engines. This new unit will have the resources, scale and expertise to develop these powertrains cost efficiently,” said Håkan Samuelsson, Volvo Cars’ president and Chief Executive.

For now, both Volvo Cars and Geely are in the process of placing their internal combustion engine (ICE) operations into new units. This will serve as the first step towards the planned merger of the two into a combined entity. The detailed plans of the new business are still under development however, and is subject to union negotiations, as well as board and other relevant authority approvals.