Volvo’s owner Geely owns a close to 10% stake in Mercedes parent company Daimler.
As more and more automakers invest heavily in electrification they are constantly seeking ways to reduce costs in other areas of the business to finance the EV push. Daimler and Geely already teamed up to form a 50/50 joint venture to develop the next generation electric Smart cars. Now it looks like they may be even closer.
A new report by German weekly Automobilwoche states that Mercedes’ parent company Daimler has been in discussions with Geely-owned Volvo in order to work together on the development and production of combustion engines. Manager from the Swede marque said that although talks had been held with Daimler but no final decision has been made. A spokesperson for Volvo said that it was too early to discuss the future plans of the company, but they aren’t ruling out anyone at the moment.
Volvo S90, V90 and V90 Cross Country Spied Testing Upcoming Reveal Daimler was also contacted to have a say in this matter. However, the spokesperson refused to give details about the new partnership and only mentioned that the company’s stake in Daimler has nearly 10%. The Chinese company also owns Lotus. This could mean that future Volvo models will be able to benefit from a suspension system modified by talented engineers from Norfolk.
As for Daimler, it has about a dozen of projects with the Renault-Nissan-Mitsubishi alliance, including a few small-displacement gasoline and diesel engines powering Mercedes’ compact cars, along with the Navara-based X-Class, a factory in Mexico, and the Twingo / ForFour city cars. The Citan small van disguises itself as a Kangoo, and the Infiniti Q30/QX30 are heavily based upon the Mercedes A-Class, and GLA.
The FCA/PSA merger is the most significant tie-up in recent automotive industry history. It was only announced a few years after General Motors’ purchase of Opel and Vauxhall.