BEIJING Dec 10 Zhejiang Geely Holding Group has
signed a deal with Volvo Car, which Geely acquired in 2010,
allowing the Chinese auto maker to tap some technologies Volvo
plans to phase out over the next couple of years.
Geely said on Monday it had signed three "technological
cooperation agreements" with Volvo, giving it access to mid-size
vehicle platform or underpinning technology, interior air
quality, and safety technology. It did not elaborate.
The deals follow an announcement in March by the two firms
agreeing to discuss specific ways Geely could tap technology the
Swedish arm plans to phase out over the next few years.
Zhejiang Geely Holding Group is parent of Hong Kong-listed
Geely Automobile Holdings Ltd.
The agreements could provide a lift to Geely's vehicle
engineering abilities and help the two companies cut costs, but
it also creates delicate questions about the possible dilution
of Volvo's brand.
In a press release, Geely pointed to "synergies" in the
"Volvo Car enjoys a leading advantage in a number of
technologies ... These technologies and experiences are valuable
to Zhejiang Geely Holding Group's exploration into overseas
market and its product quality improvement," it said.
In return, "Zhejiang Geely Holding Group's local market
exploration experience and cost control experience can also be
beneficial to Volvo Car's exploration in the Chinese market and
increase in competitiveness," it said.
Geely did not mention specific ways it plans to use the
technology from Volvo. However, Geely's founder and chairman,
who is now also chairman of Volvo, has said previously Geely
planned to develop a "premium" Geely brand of car using in part
technology from its Volvo unit.
In an interview with Reuters in April, Li said one area of
collaboration might be to use Volvo's in-car
"Air pollution in China is quite severe," he said, "so we
want to have that technology transferred to Geely to improve the
in-car air quality of Geely cars to make it more like air you
breathe in the forest."
(Reporting by Norihiko Shirouzu; Editing by Mark Potter)