News 2023-07-11

Aurobay’s owner Geely and Renault group sign joint-venture agreement to launch leading powertrain technology company

Aurobay’s owner Geely Holding, Geely Auto and Renault Group have signed a binding joint venture agreement to combine their combustion powertrain businesses into a global leader in developing, manufacturing, and supplying next-generation hybrid and highly efficient powertrain solutions to meet worldwide demand for the years to come. The closing of the agreement is expected to take place later in 2023 after anti-trust merger control and foreign investment clearance.

This joint venture will comprise 17 powertrain plants and 5 R&D centers on 3 continents with around 19,000 employees, supplying 130 countries.

For the Aurobay team, this combination represents a host of new opportunities.

“Having already been through a carve-out process, we have the experience and capability to supply world leading combustion and hybrid solutions to OEMs in the auto industry, as well as in adjacent sectors such as marine and heavy machinery, on a stand-alone basis”, says Michael Fleiss, Deputy CEO, Aurobay, and CEO, Powertrain Engineering Sweden AB

There is demand in the auto industry for a large stand-alone player to provide combustion and hybrid powertrains.

“As many automakers shift R&D investments towards electrification, they are looking to team up with a large stand-alone player with cutting-edge R&D and manufacturing capabilities in combustion and hybrid technologies. According to industry estimates, in 2040 some 900 million hybrid and ICE vehicles will still be on the roads, most of which have not been built yet”, says Michael Fleiss.

“To radically reduce greenhouse gas emissions from road transport, hybrid and ICE technologies must continue to develop. Electrification alone will not solve the problem. As a combined group, we will have the capability to develop and manufacture combustion and hybrid engines of the future, leveraging the rapid progress within e-fuel technologies”, continues Michael Fleiss.

The entity will be governed as one company, with a shared Board that will formulate and execute main strategies and set the direction. An executive team will be based in the headquarters of the new company, which is intended to be established in the UK, to consolidate operations, build on synergies, and define future plans.

Initially, the new group will have two operational centers, one in Europe and one in China.