Volvo Cars and its parent company Geely Holding have agreed to create a joint venture under the name Aurobay for its powertrain operations, as the companies proceed with their earlier announced plans to merge these into a new, stand-alone business.
The new company will be a global supplier of complete powertrain solutions, including next-generation combustion engines, transmissions and hybrid solutions.
Aurobay will initially be jointly owned by Volvo Cars and Geely Holding, and as part of the creation of Aurobay, Volvo Cars will transfer all assets in its wholly owned subsidiary, Powertrain Engineering Sweden, including its Skövde, Sweden-based engine plant and the related R&D team, along with its engine plant in China and other relevant assets to the joint venture in coming months.
The creation of the stand-alone joint venture and the transfer of assets allows Volvo Cars to focus fully on the development of its new range of all-electric premium cars in the coming years. The company aims for 50 per cent of its global sales volume to consist of fully electric cars by 2025, while 50 per cent will be hybrids, with powertrains supplied by Aurobay. By 2030, it plans for every car it sells to be pure electric.
For Geely Holding, the new entity will benefit from the addition of a strong R&D team and technologically advanced and efficient combustion engines and hybrid powertrains for its portfolio of brands, creating a strong base for substantial operational, industrial and financial synergies.
The new stand-alone business also has the ambition to supply customers outside of the Geely Holding Group, and aims to be a leading player in the supply of high-quality, low-emission, cost-efficient powertrains solutions.
Volvo Car Group in 2020
For the 2020 financial year, Volvo Car Group recorded an operating profit of 8.5 BSEK (14.3 BSEK in 2019). Revenue over the period amounted to 262.8 BSEK (274.1 BSEK). For the full year of 2020, global sales reached 661,713 cars (705,452), a decline of 6.2 per cent compared to 2019.
About Volvo Car Group
Volvo Cars was founded in 1927. Today, it is one of the most well-known and respected car brands in the world, with sales of 661,713 cars in 2020 in about 100 countries. Volvo Cars has been under the ownership of Zhejiang Geely Holding since 2010.
As of December 2020, Volvo Cars employed approximately 40,000 (41,500) full-time employees. Volvo Cars’ head office, product development, marketing and administration functions are mainly located in Gothenburg, Sweden. Volvo Cars’ head office for APAC is located in Shanghai. The company’s main car production plants are located in Gothenburg (Sweden), Ghent (Belgium), South Carolina (US), Chengdu and Daqing (China), while engines are manufactured in Skövde (Sweden) and Zhangjiakou (China), and body components in Olofström (Sweden).
Under its new company purpose, Volvo Cars aims to provide customers with the Freedom to Move in a personal, sustainable and safe way. This purpose is reflected in a number of business ambitions: for example, by the middle of this decade it aims for half of its global sales to be fully electric cars and to establish five million direct consumer relationships. Volvo Cars is also committed to an ongoing reduction of its carbon footprint, with the ambition to be a climate-neutral company by 2040.