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News 2022-11-08

Aurobay becomes part of new global company for next-generation powertrains

Aurobay is set to become part of a new global company specializing in hybrid and low-emission powertrains formed by Renault and Geely.

Aurobay’s owner Geely Holding and Geely Auto have signed an agreement with the Renault Group to combine their combustion and hybrid powertrain businesses. When the complete deal is finalized in 2023, the new company will comprise 17 plants and five R&D centers in Asia, the Americas and Europe with 19 000 employees.

The new business will be a global leader in the development, manufacturing and supply of a complete range of best-in-class powertrains, including electrified solutions. It has been set up to respond to the continued demand for electrified hybrid and low-emission powertrains, which is expected to remain part of the automotive supply chain for decades ahead.

Aurobay, with its focus on sustainability and lifecycle approach to emissions, has been leading the way in the development of low and zero emission combustion engines since becoming a stand-alone company in July 2021. Aurobay, with its 2 850 employees in Sweden and China and its unique R&D and manufacturing capabilities, will be able to make a strong contribution to the new business.

The combined business will produce around five million internal combustion, hybrid and plug-in hybrid engines and transmissions per year to customers such as Volvo Cars, Renault, Dacia, Geely Auto, Lynk & Co and PROTON. The partnership will also offer powertrain technologies to other car brands.

The new company will welcome new industrial and financial partners attracted by the opportunity to contribute to industry-leading lifecycle (or “cradle-to-grave”) low and zero emission eco-systems worldwide, and the opportunity to create value in the ongoing transformation of the automotive industry.

“The auto industry’s strong focus on electric vehicles will not be enough to reach the CO2 reduction targets. Electrification is just one of several solutions required to reach global net zero vehicle emissions targets. In many parts of the world, there will neither be enough fossil free electricity nor enough charging infrastructure to allow for rapid electrification. According to industry estimates, in 2040, 55-75% of all cars on the road will still be ICE or hybrid powered”, says Michael Fleiss, deputy CEO.

“Many automakers are concentrating on electric powertrains and will lose focus on ICE and hybrid systems. The new company will be there to develop and supply state-of-the-art products. We will have the size, the know-how and the capability to develop and manufacture low- or zero-emission hybrid engines on a scale that will reduce the global carbon footprint substantially”, says Michael Fleiss.

Also, Volvo Cars has decided to transfer its current equity stake in Aurobay to Geely Holding. Aurobay remains the sole provider of both Volvo Cars’ hybrid and combustion engines.

“Volvo Cars and Aurobay will remain strategic partners. Our 100 years of common history is a firm platform on which to build future collaboration," says Michael Fleiss.