Daimler, Geely

Daimler and Volvo could jointly develop internal combustion engines


BERLIN — Luxury German carmaker Daimler and Volvo, owned by China’s Geely, are considering cooperating to cut the costs of developing combustion engines, a magazine reported on Sunday, citing unnamed company sources.

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.

A Daimler spokesman said the company’s cooperation with Geely, which owns a 10% stake in the German carmaker, was developing in a positive way, but declined to comment further.

Global tariffs, accelerated by a trade war between China and the United States, as well as higher investment requirements for electric and autonomous vehicles, are forcing carmakers to seek new ways to cut and share costs.

In October, Volvo said it would merge its engine development and manufacturing assets with those of Geely, creating a division to supply in-house brands and also potentially others with next-generation combustion and hybrid engines.

Automobilwoche said this new division would start operating by the end of March, which could be a possible starting point for cooperation with Daimler, while a further step could be a partnership to develop electric power trains.

Geely and Daimler have said they plan to build the next generation of Smart electric cars in China through a joint venture and the two companies are also cooperating on a premium ride-hailing service in China.

Geely bought Volvo Cars in 2010 from Ford, allowing the Swedish brand to operate on an arms-length basis. But in recent years, it has deepened cooperation between the two brands.

Volvo already supplies engines to some Geely-branded vehicles, sharing technology through Geely’s Lynk brand. Both companies share and develop common vehicle platforms.

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Daimler, Geely

Daimler and Geely launch premium ride-hailing service in China


German auto giant Daimler and its Chinese shareholder Zhejiang Geely Holding Group have joined forces to take on the booming ride-hailing market in China, which is currently dominated by Didi Chuxing.

The two automakers on Tuesday established a 50:50 joint venture to offer various mobility services, starting with a premium ride-hailing service in the city of Hangzhou, which has a population of more than 10 million and is also home to Geely’s headquarters.

The service, called StarRides, will initially rely on a fleet of 100 vehicles, made of up Mercedes-Benz S-Class, E-Class and V-Class models. The service will be expanded to more Chinese cities in 2020 and could eventually include some Maybach models. And further reflecting its premium positioning, only professionally trained drivers will be used by the service.

Daimler and Geely establish mobility joint venture in China

Daimler and Geely are equally represented on the board of the joint venture. The two are also looking at additional services and plan to jointly develop the software infrastructure required to support the services.

The joint venture represents the second major partnership between Daimler and Geely following Geely’s acquisition of a 9.7-percent stake in Daimler in 2018, a move that made Geely the single biggest shareholder in the German automaker. In March, Daimler and Geely also formed a joint venture to oversee the Smart brand.

Geely boss Li Shufu previously said he wanted to join Daimler to help reshape the automotive landscape toward one filled with electric and self-driving cars, as well as to fend off new entrants in the industry like the tech and ride-hailing companies.

StarRides premium ride-hailing service launched in China

StarRides premium ride-hailing service launched in China

Daimler is also working with Chinese tech giant Baidu on a self-driving system for Chinese roads, so we could potentially see StarRides or a similar service eventually feature driverless cars.

Taking on Didi in China’s ride-hailing market won’t be easy. After a long battle, Uber in 2016 finally threw in the towel and sold its Chinese operations to Didi which counts not only Uber but also Apple and Softbank as major investors.

Geely already has some experience in the mobility space. It currently offers a ride-hailing service called Caocao across 28 Chinese cities. Likewise, Daimler has experience with its Free Now service, which is a ride-hailing service that relies on taxis and is offered in parts of Europe. Daimler is also in the process of merging all of its mobility services into a new 50:50 joint venture established with BMW Group in 2018.



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Daimler

Mercedes-Benz plans job cuts to save over a billion dollars by 2022

FRANKFURT — Tougher emissions rules will hit Daimler’s profits in 2020 and 2021, prompting the German carmaker to seek more than 1 billion euros ($1.1 billion) in savings from cutting staff costs at its Mercedes-Benz business by the end of 2022, it said on Thursday.

Daimler shares were down 2.3% in early trading at 52.17 euros, the biggest decline on Germany’s DAX blue-chip index, which was down 0.3%.

Management positions will be cut by around 10%, and company said it would also seek more than 300 million euros from cutting personnel costs — plus another 250 million euros in fixed costs — at its trucks business.

Daimler said it needed to sell more electric vehicles to meet tougher European Union rules which force carmakers to cut carbon dioxide emissions from cars by 37.5% by 2030 compared with 2021 levels, and following a 40% cut between 2007 and 2021.

The company said it expected to achieve a return on sales from operating activities at Mercedes-Benz Cars & Vans of at least 4% in 2020 and at least 6% in 2022.

Mercedes-Benz expects car sales to grow by around 3% in 2020, but said potential trade tariffs and Brexit could depress the return on sales by up to 1%.

Earlier this year, Daimler had said it hoped to achieve a return on sales of 3% to 5% at Mercedes-Benz Cars.

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