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Geely family to pool tech resources

By Li Fusheng| China Daily| Updated:  August 7, 2017 L M S

Volvo, Geely Auto and Lynk & Co to share inventions, innovation produced within the group

China's Geely Holding has partnered with Swedish marque Volvo Cars to share existing and future auto technology, which is expected to enhance their competitiveness by slashing development costs.

According to a deal the two signed on Aug 4, the 50-50 partnership, called GV Automobile Technology, will enable Volvo Cars, Geely Auto and Lynk & Co - all of which are controlled by Geely Holding - to share technologies via license agreements.

"It is a landmark moment in the development of Geely," said An Conghui, president and CEO of Geely Auto, "which will achieve synergy by closer internal cooperation on vehicle architectures, powertrain development and electrification."

The joint venture is headquartered in Ningbo, Zhejiang province, where Geely has recently built a 6 billion yuan ($893 million) research facility, and there will be a subsidiary in Gothenburg, Sweden.

Lars Danielson, a former senior vice-president of Volvo Cars, will serve as head of the joint venture.

While the technology will be available for use by the three companies, the intellectual property rights will remain with whichever company develops it, according to a Volvo statement.

An said the three companies will also cooperate in terms of production and purchasing.

"Our Luqiao plant in Zhejiang province, which is managed by Volvo, will produce both Volvo's SUV XC 40 and Lynk & Co's SUV 01."

He said achieving scale effects through collaboration will help them to stay competitive, adding that Volvo has been a good teacher and a good partner since Geely acquired the company in 2010.

Hakan Samuelsson, Volvo's president and chief executive, said the past seven years have been successful for Volvo, and further cooperation with Geely will help cut costs in Volvo's research and development and parts purchasing.

Separately, Volvo is to take a 30 percent share in Lynk & Co, joining its current shareholders Geely Holding and Geely Auto. But details, such as how much money Volvo will offer for the stake, have not been disclosed.

"We look forward to expanding our cooperation with Lynk & Co. It will be beneficial for both of us," said Samuelsson.

Volvo and Lynk & Co are already sharing technology, most notably the Compact Modular Architecture platform.

An, also head of Lynk & Co, said future modular vehicle architecture platforms and other technologies will be shared and developed based on cost-sharing agreements.

Besides technological cooperation, An said Volvo will offer help to Lynk & Co when it makes its foray into Europe and the United States, which the marque set as its destination markets when it debuted in Berlin, Germany, last year.

Alain Visser, senior vice-president of Lynk & Co, said he believes the cooperation is especially helpful to his company.

"Let's face it, if you come up with a new car brand, it is not surprising that some customers may think 'hm, let's wait and see', but the fact that we now officially have the backup of Volvo technology will give us a lot of substance."

Analysts believe the partnership will also give Lynk & Co an advantage in terms of awareness, because Volvo is a well-known brand in China.

Lynk & Co's first model, a compact SUV, will hit the market later this year. Another two models are expected to roll off the assembly line in 2018.

The company's sales network is taking shape. An said the automaker has received more than 1,000 applications from investors who would like to sell its cars and more than 100 dealerships are expected to open within the year.

Visser said the Chinese market will account for 55 percent to 60 percent of Lynk and Co's total sales worldwide.

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