Volvo Car to Sell 33% Stake in Aurobay to Geely Holding -- Update
November 08 2022 - 12:23AM
Dow Jones News
By Bingyan Wang and P.R. Venkat
Volvo Car AB will sell its 33% stake in Aurobay to Geely
Automobile Holdings Ltd. as part of the Swedish company's move to
become a fully electric-vehicle company in the next eight
years.
During this period of transition, Aurobay will remain a
strategic partner to Volvo and the sole supplier of hybrids and
mild-hybrid powertrains, Volvo said Tuesday.
"As we continue to execute on our strategy, transactions like
this will be an important supplement to our investments and
partnerships for the future," Johan Ekdahl, chief financial officer
for Volvo Cars, said.
The company said it will focus its investments and capital
allocation on developing high-performance, fully electric
powertrains.
Aurobay was formed as a stand-alone business in 2021 when Volvo
Cars Powertrain Engineering Sweden--including its Skovde-based
engine plant and related research-and-development team, along with
its China engine plant--was carved out from Volvo Car Group.
The terms of the deal weren't disclosed, though Volvo said
proceeds will be used for expansion, including its new production
line for electric motors in Skovde.
The transaction is expected to be closed before the end of this
year, the company said.
In a separate statement to the Hong Kong Exchange, Geely said
the company has signed a framework agreement with French automaker
Renault to form a powertrain technology joint venture. Each company
will hold 50% of the venture.
The new company plans to set up 17 powertrain plants and five
research and development centers with around 19,000 employees,
supplying 130 countries, said Renault. It is expected to supply
industrial customers including Dacia, Volvo Cars, Nissan and
Mitsubishi.
Write to P.R. Venkat at venkat.pr@wsj.com
(END) Dow Jones Newswires
November 08, 2022 01:08 ET (06:08 GMT)
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