Zhejiang Geely Holding Group has signed a deal with Volvo Cars that allows the Chinese carmaker to use some technologies Volvo plans to phase out within two year.
Geely announced on Monday it had signed three „technological cooperation agreements” with Volvo, a company acquired by Geely in 2010. These agreements will give Geely access to mid-size vehicle platform or underpinning technology, interior air quality and safety technology.
The agreements could improve Geely’s vehicle engineering abilities and help the two companies cut costs. However, it also brings up questions about the possible dilution of Volvo’s brand. Geely said there are 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,” Geely said in a press release.
Volvo would also benefit from the agreements, especially in the area of Chinese market experience and cost control experience, which could increase the Swedish brand’s competitiveness in China, Geely added. The Chinese automaker did not elaborate on ways it plans to use the Volvo technology. However, in an April interview with Reuters, Geely CEO Li Shufu said one area of collaboration might be Volvo’s in-car air-filtering-and-control technology.