BERLIN — Daimler will cooperate with China’s Geely to build a next-generation combustion engine for use in hybrid vehicles.
“The companies plan to develop a highly efficient modular engine,” a Daimler spokesman said, adding that it would be used in hybrid drivetrains and manufactured in Europe and China.
German factories will be retooled gradually to build electric drivetrains and the manufacture of combustion engines will continue in Germany, Daimler said.
The alliance was first reported reported by German business daily Handelsblatt on Tuesday.
Citing Daimler sources, Handelsblatt said the Daimler-Geely pact would save the German carmaker a “triple-digit million sum” – implying an amount above 100 million euros ($119 million) and less than 1 billion euros
Daimler will develop the engines, the paper said.
Geely owns a 9.69 percent stake in Daimler.
The Daimler-Geely engine tie-up does not mean the end of cooperation between Daimler and Renault, a source at Renault told Reuters on Tuesday.
Current engine projects between Renault, Daimler and Nissan will continue and new opportunities are being studied, the source said.
A joint Renault-Daimler 1.3-liter gasoline engine is used in models such as in the Renault Scenic crossover and Megane hatchbacks and in front-wheel-drive Mercedes models such as the A Class.
Mercedes uses Renault’s 1.6-liter, four-cylinder diesel engines coupled with Renault transmissions in the Vito light commercial van. A 1.5-liter diesel engine produced by Renault is used in Mercedes A- and B-class models, as well as the CLA and GLA crossovers.
Reuters contributed to this report.
