The equal joint venture will employ 19,000 staff to develop and manufacture diesel, petrol and hybrid powertrains at 17 engine plants and five R&D centres across three continents.
In a joint statement, the companies said the initial organisation will ‘secure the continuity of the business with two operational centres in…Madrid for Renault Group and Hangzhou Bay for Geely.’ An executive team in the UK will ‘consolidate operations, build on synergies, and define future plans.’
At launch, the new company is expected to supply customers including Volvo Cars, Proton, Nissan, Mitsubishi Motors Company, and PUNCH Torino.
Subject to conditions, Geely Auto and Renault will enter into a long-term procurement agreement from the joint venture for ICE, hybrid and plug-in hybrid powertrains for passenger vehicles. Renault will also obtain powertrains from the joint venture for light commercial vehicles plus the development of hybrid batteries.
Luca de Meo, CEO 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 decarbonising road transports, there is no time to lose, and it will not be business as usual. 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.”
Saudi energy giant Aramco is evaluating an investment in the new company, which would support the company’s growth and contribute to research and development across synthetic fuels and next-gen hydrogen technologies.
Commenting on this announcement, Dominic Tribe, partner and automotive sector specialist at Vendigital, said: “This is a positive step in the right direction for the UK automotive industry. As car companies continue to create joint ventures and consolidate, we will likely see more and more large-scale manufacturing sites of this nature. Joint-ventures and consolidation not only bring economic benefits for lower costs, but also sharing of resources and innovative technologies.”
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