AutoBeta(AutoBeta.net)01/06 Report--

Daimler and Volvo, parent companies of Mercedes-Benz, are considering cooperation in the field of internal combustion engines to cut R & D costs, foreign media reported.

It is worth noting that Volvo is 100% controlled by Geely, which is also the single major shareholder in Daimler, with a stake of nearly 10%.

Volvo said it had held preliminary talks with Daimler on the matter, and a spokesman for the company said it was too early to talk about the project, but did not rule out the possibility. A Daimler spokesman said the company's cooperation with Geely was actively developing, but declined to comment further.

In October 2019, Geely and Volvo announced that they were exploring a merger of their engine businesses. According to the plan, after the engine business, the partners will establish new powertrain business units, research and development, production powertrain and hybrid power system, and enhance the scale effect in R & D, production, procurement and operation. At the same time, the new business unit will become an independent powertrain supplier and can also supply other vehicle manufacturers.

The new business unit will focus on superior resources to develop and produce clean and efficient powertrains and hybrid systems, which will be installed in its Volvo, Geely, Lecker, Proton, Lutes, London Electric cars and other brands to further enhance the synergy among the brands.

Foreign media reported that Volvo and Geely's new engine business units will start operating at the end of March 2020, which may be the starting point for further cooperation with Daimler.

Daimler brokered a partnership with Volvo or had a close relationship with Geely. In February 2018, Geely Group acquired 9.69% of Daimler's voting shares through its overseas enterprises, becoming Daimler's largest single shareholder. Then the cooperation between Daimler and Geely began to deepen, and in October 2018, Daimler and Geely announced that they would form a joint venture in China based on the 50:50 share ratio to provide high-end chauffeured car services in some Chinese cities. In March 2019, Geely Holdings formed a joint venture with Daimler to jointly operate and promote the transformation of the smart brand around the world, aiming to turn smart into a high-end electric smart car brand. The joint venture is headquartered in China and each has a 50 per cent stake.

Geely and Volvo may not only meet the integration of their R & D technology, but also speed up cooperation with Daimler, which will help to cope with the changes in the automobile industry in the future. At the same time, Geely, which is weaker than the other two in terms of technological research and development, may be the biggest beneficiary.

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