Mercedes-Benz and Geely have signed a deal to jointly develop combustion engines for use in hybrid vehicles, according to a report from the Reuters news agency.
The German-Chinese manufacturers plan to collaborate with a view to share development costs, at a time when the automotive industry faces challenges from the knock-on effects of COVID 19 and stricter global emissions regulations.
"The company plans the development of a highly efficient modular engine suitable for use in next-generation hybrid models and production in Europe and China", a spokesman for Daimler is quoted as saying, without specifying how the numbers of engines produced will divide between the two countries.
The deal also means that the companies will assume much closer technical ties, with the aim to focus on 4-cylinder engines that will be shared jointly by Mercedes-Benz and Geely, as well as a number of Geely-owned brands, the report said.
In 2018 Geely, known officially as the Zhejiang Geely Holding Group Co., acquired a £6.5-billion 9.69% stake in Mercedes' parent company Daimler AG, making it the largest investor in the German manufacturer.