Engine collaboration possible between Volvo and Daimler

06 January 2020

6 January 2020 Carmakers Daimler and Volvo may decide to work together to develop combustion engines in a move designed to cut costs as the automotive industry looks to an electric future. The two companies are developing hybrid and electric powertrains – Volvo said in 2017 that 2019 would see an end to launches featuring vehicles without some form of electrification. Should any potential collaboration go ahead, it would allow more focus on this area. Volvo acknowledged that there have been initial discussions, but no concrete plans as yet, according to the German publication Automobilwoche, which broke the news, citing management sources. ′It is still too early to talk about specific projects,’ a company spokesperson said. ′However, we generally do not exclude anyone. Everything that creates synergies makes sense.’ Daimler has declined to comment. Chinese connection Both carmakers working together makes sense, thanks to investments in each from Chinese manufacturer Geely. The company owns Volvo outright, while its chairman, Li Shufu, is the largest shareholder in Daimler with a 9.69% stake. Volvo has also announced a merger of its internal combustion engine (ICE) operations with Geely, with both carving out their ICE operations into new units within their respective organisations as a first step. It is unknown if the Daimler collaboration would work with this newly-merged business or Volvo’s current standalone business. However, with the new business starting to trade in March, it is most likely that the Chinese enterprise has opened up the opportunity for Daimler to join, bringing the three largest Geely investments under one banner. Existing business Daimler too is in an existing collaboration with Geely, following the sale of 50% of its Smart brand to the Asian carmaker. The joint-venture partners have agreed that the worldwide Mercedes-Benz Design network will be responsible for styling the new generation of Smart vehicles, with engineering from Geely global engineering centres. This plan will also see Smart expand its model line-up and enter the B (small car) segment with a new range. Production in China will allow the marque to give itself a foothold in what is the world’s largest car market and adds another electric option to Geely’s portfolio alongside Volvo and the London Electric Vehicle Company (LEVC). Any partnership between Daimler and Volvo will follow on from a raft of announcements on collaborations undertaken in 2019, as the automotive industry consolidates to relieve the financial and development pressures related to electric vehicles and autonomous technology.