Volvo agrees to transfer technology to Chinese parent Geely
Zhejiang Geely Holding Group has signed a deal with Volvo Car Corp. to allow the Chinese automaker to tap some technologies Volvo plans to phase out over the next couple of years.
Geely acquired Volvo from Ford Motor Co. in 2010.
On Monday, Geely said 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 to discuss specific ways Geely could tap technology that Volvo plans to phase out over the next few years.
Zhejiang Geely Holding Group is parent of privately held Geely Automobile Holdings Ltd., which is headquartered in Hangzhou in east China's Zhejiang province,
The agreements could enhance 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 technology sharing.
"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. Li Shufu, the chairman of Geely and Volvo, has previously said that Geely planned to develop a "premium" Geely car brand using by using some 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 filtering technology.
"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."
On Monday, Geely said 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 to discuss specific ways Geely could tap technology that Volvo plans to phase out over the next few years.
Zhejiang Geely Holding Group is parent of privately held Geely Automobile Holdings Ltd., which is headquartered in Hangzhou in east China's Zhejiang province,
The agreements could enhance 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 technology sharing.
"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. Li Shufu, the chairman of Geely and Volvo, has previously said that Geely planned to develop a "premium" Geely car brand using by using some 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 filtering technology.
"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."
