Daimler to develop new engines with Geely

BERLIN: German car maker Daimler will cooperate with China’s Geely to build next-generation combustion engines for use in hybrid vehicles.

Efforts to share development costs come as the growth potential for combustion engines faces the twin threat of the COVID-19 crisis and stricter fuel-efficiency and emission rules.

“Thecompaniesplantodevelopahighlyefficient modular engine,” a spokesman for Daimler said, adding that it would be used in hybrid drivetrains and manufactured in Europe and China. Geely declined to comment.

The modular engine will be used in cars under different marques at Geely and Daimler, a person familiar with the mater said on condition of anonymity as the companies are still in the early stages of developing the engine.

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 German factories will be retooled gradually to add electric drivetrains production.

Most of the next-generation combustion engines will be made in China, business daily Handelsblat reported. The alliance with Geely, which owns a 9.69% stake in Stutgart-based Daimler, means that parts of Daimler’s existing partnership with Renault could be pared back.