Renault and Geely have agreed on a new, equally-held joint venture that will see the two automakers invest €7 billion (around $12.4 billion) on petrol engines and hybrid electric vehicle (HEV) technology.
The Renault–Nissan–Mitsubishi Alliance will reportedly benefit from the JV, as will Geely-owned Volvo and Proton.
That means future Nissan and Mitsubishi models might come with petrol engines or hybrid powertrains sourced from Renault/Geely.
Third-party automakers will also get an opportunity to source the technologies from Renault/Geely, although no other brand has stepped forward just yet.
The JV will use two operations centres initially: one in Madrid for Renault and another in Hangzhou for Geely. Renault's facility, dubbed as Horse, began operations this past week.
At full potential, the JV aims to produce up to five million internal combustion engines (ICE) and hybrid or plug-in hybrid powertrains per annum. It will employ 19,000 workers at 17 engine plants and five research and development centres.
Saudi Aramco has been in talks with Renault and Geely to acquire up to 20 per cent of the JV. If the deal pushes through, it would make the Saudi-based company the first oil giant to invest in the automaking business.
Nonetheless, Renault and Geely are set to launch the JV within the year, with the first production units from its partner brands likely launching within the next few years.