Zhejiang Geely Holding Group has signed three agreements with Volvo Car Corp. to allow the Chinese carmaker to employ some technologies Volvo that plans to phase out over the next few years. Geely signed three "technological cooperation agreements" with Volvo, enabling to gain access to mid-size vehicle platform or underpinning technology, interior air quality, and safety technology.
The agreement follows an announcement in March 2012 that the two companies would discuss ways Geely could tap technology that Volvo is planning to phase out.
The deals could significant improve Geely's vehicle engineering abilities and help the two companies reduce costs. However, the deals may give rise to the possible dilution of the Volvo brand. In a press release, Geely pointed to "synergies" in the technology sharing.
Geely said that Volvo Car enjoys a leading advantage in a number of technologies and experience that are valuable to its exploration into overseas market and its product quality improvement.
Geely added that its local market exploration experience and cost control experience can be valuable to Volvo Car's exploration in the Chinese market and increase in competitiveness.
Li Shufu, Geely's founder and chairman and currently the chairman of Volvo, has remarked that the Chinese company planned to develop a "premium" Geely brand of car using in part technology from its Volvo unit.
Li said in April that Geely might be able to use Volvo's in-car air filtering and control technology. Zhejiang Geely Holding Group is the parent company of Geely Automobile Holdings Ltd.