Volvo, Geely co-developing new compact platform

SWEDISH premium car brand Volvo and its Chinese majority shareholder Geely Holding will develop a new modular platform for compact cars at a new research and development centre to be established in Gothenburg.

The new architecture will be shared between both companies, making the most of Volvo’s technology leadership within the Geely empire.

To this end, Volvo Cars vice president of product strategy Mats Fagerhag will run the new R&D centre, which will employ around 200 full-time engineers from Sweden and China and will be fully operational by the end of this year.

Volvo says the modular architecture and component set will deliver “world-class product technologies and attributes” while cutting development, testing and sourcing costs and delivering “significant” economies of scale.

Mr Fagerhag, along with senior executives including Geely Holding chief advisor and Volvo Cars board member Carl-Peter Forster, will ensure the new platform and associated components will “meet the individual brands’ specific requirements for different cost and attribute levels”.

From top: Volvo Cars' Mats Fagerhag, Peter Mertens, Hakan Abrahamsson.

Senior vice president of R&D at Volvo Cars, Peter Mertens, said that under Geely, Volvo retains full control over the development of its next-generation C-segment cars – in other words a successor to (and derivatives of) the just-launched V40 hatch that retains elements of joint development with Ford and Mazda.

“We will not have to compromise in a way that is inevitable when partnering with an external OEM,” he said, probably referring to Volvo’s time under Ford ownership.

“The modular design allows several different vehicle platforms to be developed from one single architecture, thereby ensuring tailor-made solutions for both brands” he said.

“This will be a showcase for cooperation between a Western world premium car manufacturer and a thriving Chinese automotive company.”

Echoing Mr Mertens’ sentiment, Volvo Car vehicle line director Hakan Abrahamsson told GoAuto at the Australian V40 launch that Geely had been supportive and that he felt “greater freedom and a lot of trust from the Chinese owner”.

“My perception is that Geely want to create synergies between Volvo and Geely but not in the way to influence (us).

“With Geely Holdings, they keep Geely Automotive separate from Volvo so we cannot step on each other … I think it is more that they see that we have competence and capacity which they would like to understand more of, so I think it is more from us to them.”

He explained that while Ford had a heavy influence over Volvo, the American company brought with it some “great processes”.

“It was a tough environment, they were very critical about everything and everything had to be proven, especially when it came to financials,” he said.

“We had to adapt to the American leadership style … after a couple of years once we got used to it it worked quite well with Ford.

“This car (V40) is developed under Ford leadership and I think it will prove that it worked quite well.”

Development of a new Volvo Scalable Product Architecture for larger vehicles, continues apace at Volvo’s existing internal R&D department, with the first vehicle based on these underpinnings to be a replacement for the XC90 seven-seat SUV, due for launch next year.

As reported late last year, Volvo is investing $US11 billion ($A10.6b) into next-generation vehicle platforms, engines and manufacturing facilities between now and 2015.