Company founder Li Shufu at the Geely headquarters in Hangzhou: With the Renault joint venture, the Chinese car manufacturer is making further advances in the world.
(Photo: Reuters)
Dusseldorf The car world is going electric. Many manufacturers are therefore already concentrating their development work on the electric drive and battery chemistry. There will hardly be any new generations of combustion engines, only the existing projects will be completed. Fringe issues in the combustion engine sector no longer stand a chance, as Volkswagen announced the end of natural gas drive a few days ago.
Against this background, it may sound contradictory that joint ventures are still emerging around the combustion engine. But petrol and diesel engines will still be needed in ten years, because electric motors and lithium batteries will not spread all over the world at once. The Chinese manufacturer Geely recognized this opportunity; the company is working on a global consolidation of combustion engine production.
Geely immediately attracted attention with two big deals. The Chinese are setting up a drive joint venture with Renault, into which the partially state-owned French manufacturer is bringing its entire combustion engine business. 17 factories with around 19,000 employees will be largely controlled by Geely in the future. At the same time, the Chinese take over the entire engine production of their Swedish subsidiary Volvo.
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The rationale behind it is quickly explained. Combustion engines will lose importance. But if you can now produce them in large quantities and use them worldwide, you have an extreme cost advantage. With the engine production of Renault and the aggregate production of Volvo, Geely is continuing to expand its global combustion engine network. The Chinese car group also announced an engine joint venture with Mercedes some time ago.
In just a few years, Geely will play an important role in the global production of internal combustion engines and thus push back the German manufacturers who have been leaders in this field. Volkswagen, Mercedes and BMW have made a commitment: the further development of the electric drive is clearly the focus for them.
Geely’s rise to become a leading manufacturer of internal combustion engines is representative of the growing importance of the Chinese automotive industry. Especially when it comes to electric drives, manufacturers such as BYD, Great Wall and Nio have risen to the first category. Geely is now rounding off the range on the combustion engine side.
The times are over when the People’s Republic was simply a lucrative sales market for Mercedes, BMW and Volkswagen. China has turned things around: its automakers have become global and must be taken seriously.
More: Renault will build internal combustion engines with a Chinese partner in the future