The merger of powertrain operations between Volvo Cars and its parent company Geely has now formally taken shape, with the formation of a new joint venture under the name Aurobay.

According to the press release, the new company aims to be a “global supplier of complete powertrain solutions”, which includes combustion engines, transmissions, and hybrid solutions.

Aurobay will initially be jointly owned by Volvo and Geely, and as part of the creation of the new company, the former will transfer all assets in its wholly owned subsidiary, Powertrain Engineering Sweden, to the new joint venture in the coming months.

These assets include its Skövde engine plant in Sweden and the related R&D team, along with its engine plant in China and other relevant assets.

With all powertrain development and assets handed off to the new joint venture, Volvo will be focusing fully on the development of its new range of all-electric premium cars in the coming years.

Volvo recently also formed a new joint venture with Northvolt to produce “more sustainable batteries” for its next-gen EVs

The company previously announced its plans to achieve 50% EV sales by volume globally by 2025, while the other 50% will be hybrids, with powertrains supplied by Aurobay. By 2030, all new Volvo cars will be fully-electric.

As for Geely, the new entity – with the addition of a strong R&D team from Volvo Cars – will be capable of supplying “technologically advanced and efficient combustion engines and hybrid powertrains” for its portfolio of brands. This should include Proton, which Geely holds a 49.9% stake.

The 1.5-litre turbocharged three-cylinder engine in the Proton X50 is already co-developed between the two companies. Find out what makes it so quiet!

In addition, the new stand-alone business also plans to supply customers outside the Geely Holding Group, and aims to be “a leading player in the supply of high-quality, low emission, cost-efficient powertrains solutions”.