(Yicai Global) July 11 -- Chinese auto giant Geely Holding Group and its French counterpart Renault Group are joining forces to set up an equally owned joint venture that makes vehicle powertrains, which comprise the engine, transmission and drivetrain, which will be headquartered in the UK.

The new JV will develop and manufacture hybrid and internal combustion engine powertrain solutions as well as synthetic fuels, Hangzhou-based Geely said today. The two parties first announced their proposed partnership in November last year.

The JV, which will also have two operational bases in Spain’s Madrid and China’ Hangzhou, could offer solutions for 80 percent of the global internal combustion engine and hybrid market, Geely added.

Renault, Geely, Volvo Cars, Proton, Nissan, Mitsubishi Motors and PUNCH Torino, are expected to be among the JV’s clients at the outset, and this will expand to include more third-party car firms in the future, Geely said.

“We are proud to join forces with a great company like Geely to set up a new player, up to the challenge, able to disrupt the game and open the way for ultra-low emissions ICE technologies,” said Luca de Meo, the chief executive of Boulogne-Billancourt-based Renault.

“With this agreement, we reiterate our commitment to leveraging our group-wide technological expertise and brand portfolio to pioneer the journey to greater sustainability and value creation which will lead to better consumer experiences,” said Geely Chair Li Shufu.

Saudi Arabia’s Aramco signed a letter of intent to become a minority stakeholder in the JV in March. As the world’s largest petroleum company, Aramco’s investment would support the growth of the JV and contribute to research and development in key domains such as synthetic fuels and next-generation hydrogen technologies, Geely said.

Editor: Kim Taylor