Last week, Geely Auto, not to be confused with parent company Geely Holding which owns the Volvo Car Group, announced that it will no longer merge with Volvo Car. Instead, both Geely Auto and Volvo Car will remain separate (but still operating under the umbrella of Geely Holding), but will instead work together on specific electric vehicles- and driverless car-related projects.
In layman’s terms, it means that the Swedes at Volvo Cars and Chinese at Geely Auto will continue to do their own thing, only coming together for certain powertrain and driverless cars-related projects.
It also means that Volvo’s unique Swedish identity will remain intact. There’s little need to merge Volvo Cars with Geely Auto because such an arrangement would’ve made the jointly-owned Lynk & Co brand redundant.
Volvo Car CEO Hakan Samuelsson told Automotive News Europe, "First of all, we didn't really change our mind. What became clear was that Volvo and Geely are two of the fastest growing car brands in the world. We have to be very careful not to disturb that focus on top-line growth, that focus on people being proud of their brand and maintaining that momentum. That became more and more obvious because you know what happens when you merge. There are internal discussions about organization. Who will lead this or that? How do you bring the sales organization together? This is often a disaster. That is one very important point."
With this clear separation, both Volvo Cars and Geely Auto can now strengthen their individual namesake brands, while at the same time making their jointly-owned Lynk & Co brand global.
So what does all these mean for consumers? Here’s a simple rundown.
1. Volvo Cars and Geely Auto will increase the number of shared engines and transmissions.
Presently, this is limited only to the three-cylinder turbocharged 1.5TD engine and 7-speed dual-clutch automatic transmission used by the Proton X50 and Volvo XC40 Recharge T5. The engine is available with port or direct injection, as well as in regular combustion engine (Proton X50) or plug-in hybrid form (Volvo XC40 Recharge T5).
2. Future Volvo and Geely electric vehicles will be nearly identical underneath the body shell, sharing the same electric vehicle-optimized platform and electric drivetrain, and other semi-autonomous driving hardware.
3. Lynk & Co will become a global brand, leveraging on Volvo’s global dealer and service network. It could also mean that some Volvo dealers will be selected to sell the younger lifestyle- and subscription service-oriented Lynk & Co brand.
Currently, Lynk & Co is only focused in China and Europe. Entry into the US and other parts of Asia and Middle East are planned.
Does it mean Geely cars will be like Volvos?
Yes and no. Volvo cars will continue to use more sophisticated plaforms while Geely models will use lower cost ones.
For example, the SPA platform that currently underpins the 60 and 90 series Volvo cars are still exclusive to Volvo. Only the lower range CMA platform used by the XC 40 is shared with Geely and Lynk & Co.
However like all technology trends, the SPA platform will eventually trickle down to future Geely/Lynk & Co models, but by then, Volvo cars would have moved on to the second generation SPA 2 platform.
For the rest world, but not Malaysia
However, all of the above mean very little to Malaysians. If you harbour ambitions of buying a Proton-badge Volvo, sorry that’s not happening.
The simple reason is that the partnership referred to here is heavily focused on powertrain electrification and driverless cars – both topics are far too advanced for our unfortunately backward-minded government and policy makers to act upon.
As such, most of the upcoming products resulting from this closer cooperation between Volvo Car and Geely Auto will skip Malaysia.
At most, you may say it features the same transmission and base engine (minus the electrification bits) with a Volvo, just like the Proton X50 TGDI and the plug-in hybrid Volvo XC40 Recharge T5.
The Volvo Car Group will phase out regular combustion engine cars. All Volvo models launched from 2019 onwards must either be a hybrid or an electric vehicle. The company aims to have electric vehicles contributing 50 percent of its sales by 2025, with the remaining half coming from hybrids.
It’s the same with Geely Auto. In China, it’s super important to have electric vehicles in a car manufacturers’ portfolio. The reason has little to do with green credentials. It’s just simple business logic.
In many major Chinese cities, sales of combustion engine cars are restricted by a monthly quota, which electric and plug-in hybrids are exempted from. A company that has no electric vehicles in its line-up can forget about attaining reasonable commercial success. This is how Chinese policy makers accelerate EV adoption there.
This is why Geely developed the open-source Sustainable Experience Architecture (SEA) for electric vehicles, while Volvo is moving towards its generation SPA 2 (second generation Scalable Product Architecture), both are developed specifically to meet the requirements of electric and driverless cars.
Meanwhile in Malaysia, there are no plans for a Proton hybrid, let alone electric vehicle. There is simply no push/demand for Proton to do the same here, meaning that SPA2 and SEA platform cars won't trickle down to Proton.
The reason is a combination of lack of tax incentives to kickstart mass adoption of hybrid and electric vehicles, as well as local consumers’ negative perception towards such cars.
The nature of electrified vehicles means that it will certainly cost more than regular ones and nearly all major markets of electric vehicles need some form of government incentive to kickstart demand.
Setting up enough public charging facilities is a tall order, especially in cities where many live in high rise buildings. A dual-pronged approach that includes promoting hybrids as a stop-gap measure is the way forward.
If our country doesn’t move forward to embrace hybrids and electric vehicles, Proton will forever be stuck with lower-end powertrain options.
Like many companies, Volvo and Geely are no longer investing to develop new combustion engines, at least not traditional non-electrified ones.
Every combustion engine developed today is designed to work with some form of electrification. Without it, the buyer (you and I) are just getting half of what the complete engine is supposed to be.
The whole point of Geely cutting out one cylinder to make a 3-cylinder engine is so it has enough space to accommodate the hybrid hardware. Without it, you are just dealing with the downsides of a 3-cylinder engine, with none of the upside.
The engine that’s fitted in the Volvo XC 40 Recharge T5 is how the 1.5TD engine is supposed to work from the onset.
Malaysia needs to start adopting hybrids and electric vehicles in a big way. Our neighbours in Thailand, Indonesia, and Philippines are already jumping with both feet in.
Hybrid technology pioneer and market leader Toyota for example, sells 6 hybrid models across the region, but none in Malaysia, which last sold the locally-assembled Toyota Camry Hybrid in 2018.
Our neighbours Thailand, Indonesia, and Philippines have all progressed to sell at least 4 hybrid Toyota models there.
In Singapore, there are so many Grab drivers choosing hybrids, especially the Toyota Prius, for their high mileage work. To meet the demand from Grab drivers, Toyota’s local distributor Borneo Motors has a special express service package catered exclusively to Grab drivers - from reception to vehicle delivery in just 30 minutes – the kind of speedy service that only Toyota could offer.
All these countries have similar climate to ours.
Meanwhile in Malaysia, we are still talking about low resale value of hybrids, or whether batteries are expensive to replace (it’s meant to be offset by reduced fuel cost).
Over in Thailand, high mileage executive taxi fleet operators there are already switching to hybrids, specifically the Prius and Camry Hybrid.
In Indonesia, the Blue Bird taxi company also offers Tesla Model X as part of their executive taxi fleet, while Grab uses the Hyundai Ioniq Electric as airport taxi.
This is the downside to fuel subsidies, it removes incentives to switch to green technology, and thus consumers here can't progress beyond these very backward thinking opinions, but that’s another topic altogether.
The future models that Geely Auto and Volvo Cars are jointly developing will ride on electric vehicle-specific platforms.
Volvo’s model line-up is already 100 percent electrified, even in Malaysia. As such, the Volvo Car Group doesn’t have anything to share with Geely, or Proton that is not electrified.
Regular combustion engines are now just a side-show, a by-the-way alternative for countries that are still too backwards for hybrids and electric vehicles.
If Malaysia doesn’t step up to embrace hybrids and electric vehicles, the gulf between future Proton models and the Geely Auto Group’s/Volvo Car Group’s global models will only widen further.
We don't want to be in the situation where we are giving tax advantage to a quasi-national car company only for local consumers to get half of what the engine was originally meant to be (with plug-in hybrid). We can't blame Geely or Proton though, as they are merely responding to consumer demand.
If we don't catch up with our neighbours to embrace hybrids and electric vehicles, Malaysians won't realize their dream of buying a budget Volvo, but will merely pay for powertrains that are no longer fit for use in other countries.