German automaker Daimler is to partner with China's Geely to build next-generation combustion engines for hybrid vehicles.
Daimler
The partnership comes at a time when the growth potential for combustion engines faces uncertainty from the double threat of the coronavirus pandemic and ever-stricter fuel efficiency and emissions rules.
“The companies plan to develop a highly efficient modular engine,” said a Daimler spokesperson, adding that it would be used in hybrid drivetrains and made in Europe and China.
The engine will be used both Geely and Daimler cars of different marques, Reuters reported an anonymous source as saying.
News of the alliance was a surprise to Daimler’s works council at its factory in Untertuerkheim, which specialises in electric and gasoline powertrain assembly.
“We are speechless. There was not even a discussion about potential alternative manufacturing locations,” said Michael Haeberle, the works council chief for Untertuerkheim.
“We have the ability to build four-cylinder engines in Untertuerkheim but there were no talks about it.”
Daimler said it will retool its German factories to enable the production of electric drivetrains.
Most next-generation combustion engines will be made in China, according to German business daily Handelsblatt. The alliance with Geely, which owns a 9.69% stake in Daimler, means that the Stuttgart-based auto firm's partnership with Renault could be scaled back, though Reuters quoted a source at Renault as saying that this was not necessarily the case.
Citing Daimler sources, Handelsblatt said the Daimler-Geely pact would save the German carmaker a “triple-digit million sum”.
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