ROME – The Horse Project is a reality. Renault and the Chinese group Geely (which already owns Volvo and 50% of Smart) have signed contracts for the establishment of a 50/50 joint venture to create a new engine and transmission company, with the aim of becoming the world leader of the development, production and supply of the best state-of-the-art hybrid and thermal powertrains. And Aramco could also enter the game. In fact, the Saudi oil giant signed a letter of intent with the other two groups as early as last March 2 and plans to make a strategic investment in the new company to contribute to the research and development of synthetic fuel solutions and next generation hydrogen. Synthetic fuels, which include e-fuels and hydrogen, are part of the solution for decarbonising the automotive industry, even for internal combustion engine vehicles currently on the road.
The joint venture, for which an investment of 7 billion is planned, will be jointly managed by Renault and Geely, with a board composed in equal parts by representatives of both groups. The initial organization will ensure business continuity with two operational centers responsible for the respective operations: Madrid for the Renault group and Hangzhou Bay for Geely. In the headquarters of the new company, which should be based in the United Kingdom, a management team will be established with the task of consolidating operations, developing synergies and establishing strategic orientation.
According to the objectives of the two groups, the new joint venture could offer solutions to 80% of the world market for internal combustion engines and hybrid engines. From launch, the new company is expected to supply a number of industrial customers, including the Renault Group, Geely Auto, Volvo Cars, Proton, Nissan, Mitsubishi Motors Company and Punch Torino. And it is also ready to welcome any partnership aimed at broadening the coverage of the value chain.
The joint venture will employ 19,000 people in 17 factories and five research and development centers.
The CEO of the Renault group, Luca De Meo, stated that “faced with today’s challenges in the automotive industry, no one can claim to have all the solutions. To offer breakthrough innovations, you need to join forces and skills. In the race to decarbonise the automotive industry, there’s no time to lose. We have to think and act differently. Today, we are proud to join forces with those of a large company like Geely to create a new player, capable of taking up the challenge, turning the tables and paving the way for ultra-low emission internal combustion engine technologies> .
And Eric Li, President of Geely Holding Group in turn declared: “We are delighted to embark on this adventure to become a world leader in hybrid technologies, providing low-emission solutions to car manufacturers around the world. With this agreement, we reaffirm our commitment to leverage our technology expertise and Group-wide brand portfolio to pave the way for more sustainable development and value creation, thereby improving the customer experience.”