Volvo engines and MORE to be used by Geely Autos and Lynk & Co – and Proton too?

Volvo has entered an agreement with parent Geely to use its engines, platforms and more in Geely cars, as well as Lynk & Co. Perhaps Proton will follow too.

No one can complain that Geely has made a mess of Volvo since it acquired it from Ford – in fact quite the contrary.

Volvo has gone from strength to strength in recent year under Geely, making bold decisions on two new platforms and delivering cars like the new 90 range, new XC60 and, very soon, the new Volvo XC40.

In the process, Volvo has gone from a ‘wannabe’ premium car maker, which fitted in to the market somewhere between mainstream and premium, to delivering a real challenge to the premium marques with individual product which stands out from the crowd.

But now Geely wants a big piece of what Volvo has achieved for its own benefit, so the arrival of a new joint venture between the two – GV Automobile Technology Ltd – will see Geely Auto and Lynk & Co getting access to Volvo’s engines – initially the new 1.5 litre range but later the 2.0 litre range – and its platforms.

Clearly this is a big advantage for Geely as it grows its sales in China, and will give them cars which have legs beyond China, and it’s already given Lynk & Co an almost complete car to go out and fight for customers, albeit with a different sales model.

To that end, Lynk & Co now are to be owned jointly by Volvo, Geely Autos and Geely holdings (in a 30/50/20 split).

There are advantages for Volvo in terms of procurement and development costs – economies of scale are not to be sniffed at – but it does present dangers too.

Volvo is clearly the ‘Premium’ partner here, and they’re going to have to work very hard to market their difference or suffer as buyers twig they can get the same car but with a different badge for a chunk less.

And although there’s been nothing official, it seems highly likely Geely has similar plans for their recent purchase of Proton, reviving the brand by delivering cars which are basically Volvos under the skin.

It was probably inevitable this would happen, but it certainly presents significant challenges for Volvo.