On Friday, French automaker Renault and its Chinese partner Geely announced a highly anticipated joint venture, aiming to boost the competitiveness of their legacy vehicle industry. This move signals a strategic collaboration poised to reshape the automotive landscape. The partnership will produce combustion and hybrid engines.
Competing manufacturers are increasing their investments in low-emission powertrains in reaction to declining sales of electric vehicles. Consequently, the venture is focused on creating more efficient gasoline engines and hybrid systems.
Toyota Motor unveiled next-generation engines on Tuesday that can be utilized in hybrids and other vehicles with lower emissions. This week, China’s BYD also unveiled new hybrid technology that uses less fuel.
“A combination of various powertrain technologies is necessary … to achieve a successful decarbonization in a world where more than half of vehicles produced are expected to still rely on combustion engines by 2040,” a joint statement from Renault and Geely stated.
Renault’s plan to stay competitive against bigger rivals hinges on the 50-50 joint venture. Through this initiative, it has forged numerous partnerships to enter new markets and cut costs.
Renault, as part of its extensive restructuring, intends to separate its internal combustion engine division and concentrate on electric vehicles. Additionally, this restructuring includes reorganizing its long-standing partnership with Nissan Motor.
For Geely, the agreement continues its trend of forming alliances in order to grow outside of China. Mercedes-Benz and Geely earlier established a partnership for the development of hybrid gasoline engines. Geely also has stock in the German carmaker.
The company, called HORSE Powertrain, will supply both the companies’ brands and independent manufacturers. Its headquarters will be in London.
According to the automakers, the business anticipates generating approximately 15 billion euros ($16.2 billion) in revenue annually. Additionally, it plans to produce approximately five million powertrain units.
Daniel Li, the CEO of Geely Holding, would chair the board, while Matias Giannini would serve as chief executive officer.
Giannini was once a global sales leader at Vitesco Technologies, a powertrain company that was separated from Continental, a car supplier.
Although the project has been anticipated since the start of the year, Reuters has been informed by sources that China’s regulatory approval of the project was delayed at least three times.
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