Geely to hold 40 percent of Renault engine company

Geely Automobile Holdings of China is looking to acquire a 40 percent stake into a planned combustion engine unit that French marque Renault will separate from its electric vehicle (EV) business. 

Renault and Geely are each expected to hold 40 percent of the former's upcoming combustion engine unit  

A report by Reuters cites two sources close to Renault on the matter. They add that Nissan, one of Renault’s alliance partners, has no plans to acquire a stake in the upcoming company despite a proposal from Renault that the Japanese automaker participate in the deal.  

According to the sources, both Geely and Renault will hold 40 percent of the new unit, with the remaining 20 percent going to an unnamed oil company that the Chinese car brand is currently in talks with. However, the plan is reportedly not yet finalized, leaving a window of opportunity for other partner manufacturers. 

If the deal pushes through, it would be a boost to Geely’s portfolio, which currently includes Volvo Cars of Sweden and Lotus Cars of Britain, as well as a stake in German motoring powerhouse Mercedes-Benz. 

The acquisition is expected to boost Geely's global portfolio

Renault is scheduled to reveal plans for establishing a France-based unit dedicated to EVs. A second unit to be put up overseas is expected to combine Renault’s production sites in Spain, Portugal, Turkey, Romania, and Latin America. These facilities are responsible for assembling the automaker’s gasoline and hybrid engines as well as transmissions. 

The French carmaker is likely to retain majority shares in its “Ampère” electrical division, slated to be listed on the stock market in 2023 and will comprise a workforce of 10,000. Meanwhile, Renault’s will keep its minority stake in its “Horse” combustion engine arm.   

Renault will develop hybrid vehicles in South Korea together with Geely 

Sharing costs for gasoline and diesel engines will allow Renault to free up funds that it will reinvest in electric models, while the involvement of an oil company is seen to help development of green hydrogen along with the accompanying infrastructure. 

In May 2022, Geely bought 34 percent of Renault’s South Korean subsidiary. The two automakers will also develop hybrid vehicles to be assembled at Renault’s facilities in Busan. 

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