# Renault, Geely ink pact with Aramco for engine venture
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2023-03-02
Category: TECHNOLOGY
Category URL: https://financedigest.com/category/technology
Meta Title: Saudi Aramco to Take Minority Stake in Geely-Renault
Meta Description: Discover how Renault and Geely's new joint venture with Saudi Aramco aims to revolutionise internal combustion engine technology and reduce emissions.
URL: https://financedigest.com/renault-geely-ink-pact-with-aramco-for-engine-venturehtml

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(Reuters) -Oil giant Saudi Aramco has agreed to take a minority stake in a new powertrain engine company that French car maker Renault SA and China’s Geely Automobile Holdings Ltd plan to set up jointly, they said on Thursday.

Reuters reported in January that Aramco has been involved in advanced discussions to take a stake of up to 20% in a previously announced but still-unnamed Geely-Renault powertrain company that would develop and supply internal combustion engines (ICE) and hybrid technologies.

They said on Thursday Geely and Renault are expected to retain equal equity stakes in the new independent entity, but did not disclose how much each would own and how much Aramco would invest.

The new joint venture is aimed at developing more-efficient gasoline engines and hybrid systems at a [time when the focus](https://www.financedigest.com/why-manufacturers-mustnt-lose-their-green-focus-in-troubled-times.html "WHY MANUFACTURERS MUSTN’T LOSE THEIR GREEN FOCUS IN TROUBLED TIMES") of much of the automobile industry has been on the capital-intensive transition to purely electric vehicles.

“This partnership with Aramco will… give it a [head start in the race towards](https://www.financedigest.com/are-we-headed-towards-a-banking-as-a-service-revolution.html "Are we headed towards a Banking as a Service revolution?") ultra-low-emissions ICE powertrain technology,” Renault CEO Luca de Meo said in the statement.

By carving out its internal combustion engine business, Renault plans to focus on electric cars, part of the French automaker’s broad restructuring that also involves overhauling its decades-old [alliance with Nissan](https://www.financedigest.com/from-boom-to-bottom-and-now-big-change-renault-and-nissan-reshape-alliance.html "From boom to bottom and now big change: Renault and Nissan reshape alliance") Motor Co.

Aramco’s entry brings to the table unique know-how that will help [develop breakthrough innovations](https://www.financedigest.com/avaloq-enlarges-innovation-ecosystem-through-launch-of-developer-portal.html "Avaloq enlarges innovation ecosystem through launch of developer portal") in the fields of synthetic fuels and hydrogen,” De Meo said.

The deal would make Aramco the first major oil producer to invest in the car business, as the rise of [electric cars](https://www.financedigest.com/electric-car-insurance-your-questions-answered.html "Electric car insurance: your questions answered") threatens to cut demand for conventional fuels.

Last year, Aramco announced a partnership with Hyundai Motor Co to study advanced fuels that could be used in hybrid engines to reduce [CO2 emissions](https://www.financedigest.com/global-energy-related-co2-emissions-edged-up-to-record-high-in-2022-iea.html "Global energy-related CO2 emissions edged up to record high in 2022 – IEA").

For Geely, the deal with Renault extends its pattern of building [partnerships to expand](https://www.financedigest.com/forescout-and-fireeye-expand-partnership-enabling-faster-response-to-cybersecurity-threats.html "FORESCOUT AND FIREEYE EXPAND PARTNERSHIP, ENABLING FASTER RESPONSE TO CYBERSECURITY THREATS") beyond China. Geely previously announced a hybrid gasoline engine development [deal with Mercedes-Benz and holds a stake in the German](https://www.financedigest.com/volkswagen-strikes-below-inflation-wage-deal-continues-german-trend.html "Volkswagen strikes below-inflation wage deal, continues German trend") automaker.

The new company would have an annual production capacity of more than 5 million internal combustion, hybrid and [plug-in](https://www.financedigest.com/mg-motor-launches-plug-in-hybrid-option-in-mexico-as-ev-race-heats-up.html "MG Motor launches plug-in hybrid option in Mexico as EV race heats up") hybrid engines and transmissions per year, the companies said.

(Reporting by Anirudh Saligrama in Bengaluru; Editing by Muralikumar Anantharaman, Christian Schmollinger and Kim Coghill)


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