Aramco allied with Renault and Geely?

(Boursier.com) — Aramco would be in advanced talks to acquire up to 20% of the capital of the joint venture Geely-Renault in powertrains, according to Reuters. People familiar with the talks say the company is in talks to join the alliance in a move that would leave Renault and Geely a 40% stake each in the company. A document prepared by the companies shows that the powertrain business could be established this year with the goal of producing more than 5 million “low-emission and hybrid engines and transmissions” per year.

Renault and the Chinese Geely Holding are therefore working to finalize an agreement on the entry of Saudi Aramco as an investor and partner in their joint venture in gasoline engines and hybrid technologies, three sources familiar with the matter told Reuters. The Saudi oil producer could take up to a fifth of the shares of the entity, whose final name has not yet been chosen and that Renault and its Chinese ally want to set up this year. According to a document that Reuters was able to consult, the objective would be to create a new equipment manufacturer by 2023 with a potential production capacity of five million low-emission and hybrid engines, and associated transmissions, per year. The entity would bring together the main assets of the diamond group in thermal engines and the technologies and associated assets of the Chinese manufacturer in gasoline and hybrids. This new entity, bearing the name of ‘Project Horse’ on the Renault side (‘Rubik’ on the Geely side), aims to gain scale in traditional internal combustion engines and to develop the most efficient petrol engines and hybrid systems possible.

According to the document seen by Reuters, Aramco’s investment will be used to support the development of decarbonization technologies for gasoline engines, as well as research and development of key technologies in engines and transmissions. The three allies intend to finalize an agreement in the coming weeks.