Mercedes-Benz and Geely to collaborate on new petrol engines

Mercedes-Benz is planning to shift the majority of its four-cylinder petrol engine production to China in a move that will greatly expand its activities with Chinese car maker Geely.

The deal will mean the parent companies of Mercedes-Benz and Geely, Daimler and Geely Holdings, will assume much closer technical ties. The two companies plan to jointly develop and produce a new family of four-cylinder petrol engines to be used in future hybrid models from both companies at a factory in China from 2024, according to information obtained by Germany’s Handelsblatt newspaper.

A spokesperson from Daimler is quoted as saying: “The company plans the development of a highly efficient modular engine suitable for use in next-generation hybrid models and production in Europe and China.”

Mercedes-Benz is yet to indicate how many engines it plans to produce in China, although the suggestions are that it will be in the “hundreds of thousands per year”.

Further details to the German-Sino co-operation remain under wraps, but Mercedes-Benz sources suggest the new four-cylinder would be used jointly by Mercedes-Benz and Geely as well as a number of Geely-owned brands, including Volvo, Lynk&Co, Proton and, possibly, Lotus.

The joint engine development and production programme follows the 50% buy out of Mercedes-Benz’s Smart city car division by Geely in 2018.

Future Smart models – including a new crossover to rival the likes of the Volkswagen T-Cross as well as a successor to today’s two-seat Fortwo city car – will also be jointly developed and produced by Mercedes-Benz and Geely in China.

UPDATE: 
On November 20, the two automakers issued an official statement: "Daimler AG and Geely Holding, the respective parent companies of Mercedes-Benz AG and Volvo Cars, have launched plans to collaborate on developing highly efficient powertrain systems for next-generation hybrid vehicle applications.

The cooperation is expected to see the companies work together on hybrid powertrain solutions to enhance their global competitiveness and create true economies of scale. Areas of potential cooperation include engineering, sourcing, industrialization and efficiency measures."

"Both groups see efficient drivetrain technologies as central to the ongoing transformation of the automotive industry, and will accelerate the transition to emission-free driving. Both groups will use global R&D networks to work together on a next-generation gasoline engine specified for hybrid applications to be produced at the companies’ powertrain facilities in Europe and China, which could be utilized by Mercedes-Benz AG together with its established partners in China as well as the wider Geely Holding Group portfolio of brands including Volvo Cars. To this end, the export of the engine from China is considered to be an option."

The cooperation is expected to see the companies work together on hybrid powertrain solutions to enhance their global competitiveness and create true economies of scale. Areas of potential cooperation include engineering, sourcing, industrialisation and efficiency measures.

Both groups see efficient drivetrain technologies as central to the ongoing transformation of the automotive industry, and will accelerate the transition to emission-free driving. Both groups will use global R&D networks to work together on a next-generation gasoline engine specified for hybrid applications to be produced at the companies’ powertrain facilities in Europe and China, which could be utilized by Mercedes-Benz AG together with its established partners in China as well as the wider Geely Holding Group portfolio of brands including Volvo Cars. To this end, the export of the engine from China is considered to be an option.

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