3 minute read - 13th July 2023
Renault-Geely engine company to have UK headquarters
Following the framework agreement announced in November 2022, Renault Group and Geely have signed a 50/50 joint venture agreement to launch a new powertrain technology company that aims to become the global leader in developing, manufacturing and supplying next-generation hybrid and highly efficient ICE powertrain solutions.
An executive team will be based in the headquarters of the new company, which is set to be established in the UK. Renault and Geely said the new company will use the headquarters to consolidate operations, build on synergies and define future plans. The new company will include 17 engine plants and five R&D centres across three continents with 19,000 employees.
The new company aims to have an annual production capacity of up to five million internal combustion, hybrid and plug-in hybrid engines and transmissions per year. The completion of the transaction is expected to take place in H2 2023 and remains subject to the conditions normally applicable to this type of transaction.
Renault and Geely’s new joint engine and powertrain venture is set to have its headquarters in the UK – it will supply powertrain solutions to various group companies / Picture: Renault Group
At launch, the new company is expected to supply multiple industrial customers including Renault Group, Geely Auto, Volvo Cars, Proton, Nissan, Mitsubishi Motors Company, and Punch Torino. In the future, the joint venture will be capable of providing end to end solutions in powertrain technologies to third-party car brands and will welcome partners to further strengthen the value chain.
The venture will be jointly led by Renault Group and Geely, with equal board members to formulate and execute strategies and set the direction for the joint venture. The organisation will initially secure the continuity of the business with two operational centres in charge of the respective operations: Madrid for Renault Group and Hangzhou Bay for Geely.
Renault Group and Geely will transfer intellectual property to the operational centres enabling them to be fully autonomous in developing future powertrain technologies capable of addressing all market expectations. The new joint venture’s complementary product portfolio and regional footprint could offer solutions for 80% of the global ICE and hybrid market.
Luca de Meo, CEO of Renault Group, said: “Facing today’s automotive challenges, no one can claim to have all the solutions alone. Coming up with breakthrough innovations requires to combine expertise and assets. When it comes about the global race for decarbonizing road transports, there is no time to lose, and it will not be business as usual. Today, we are proud to join forces with a great company like Geely to set up a new player, up to the challenge, able to disrupt the game and open the way for ultra-low emissions ICE technologies.”
Eric Li, Geely Holding Group chairman, added: “We are pleased to be embarking on this journey to become a global leader in hybrid technologies, providing low-emission solutions for automakers around the world. With this agreement, we reiterate our commitment to leveraging our group-wide technological expertise and brand portfolio to pioneer the journey to greater sustainability and value creation which will lead to better consumer experiences.”
Aramco, which signed a letter of intent with Renault and Geely in March this year, is evaluating a strategic investment in the new powertrain technology company. Aramco’s investment would support the growth of the company and contribute to key research and development across synthetic fuels solutions and next-gen hydrogen technologies.