German luxury car maker Daimler Benz and Chinese owned Swedish car maker Volvo are considering the possibility of co-developing future internal combustion engines. As per reports in the media, Geely, which owns Volvo Cars and also a 10% stake in Daimler Beenz is considering collaboration in view of rising development costs.
Geely had acquired Volvo Cars from Ford in 2010 and has slowly started integrating certain facilities like engines. It is understood that Volvo is already supplying engines for certain Geely models. With the developments costs being spread across technologies due to the increased emission control requirements and the need to develop electric as well as/ or fuel cell technologies, the cost of development is mushrooming. As a result, several companies are looking at different collaborative means to reduce the development cost as well as spread the risk.
Though, none of the companies have confirmed, The Automobilwoche weekly cited a Volvo manager as saying there were initial talks with Daimler, but no concrete plans, while a company spokesman said it was too early to talk about firm projects, although it was not excluding anybody.
The Transport Journal 