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Report: Daimler, Volvo Cars in talks to collaborate on combustion engines

German carmaker Daimler AG is in talks with Zhejiang Geely Holding Group Co. Ltd.-owned Volvo Cars to collaborate on the development of combustion engines in a bid to cut costs, Reuters reported Jan. 5, citing German magazine Automobilwoche.

Automobilwoche reportedly said, citing a Volvo Cars manager, that the new division would become operational by the end of March.

Volvo Cars' parent Geely, which owns 10% of Daimler, already has plans to form an electric car joint venture with the Mercedes Benz owner. The plan gained approval from the European Commission in December 2019.

Back in October, Volvo Cars said it would be merging its combustion engine operations with Geely, establishing a stand-alone business.

A potential venture between Volvo Cars and Daimler could mean that the combustion engine operations of Geely would also be included in the partnership.

A Volvo Cars spokesman reportedly told Reuters that it was too early to talk about firm projects, while a Daimler spokesman reportedly said the company's partnership with Geely was developing positively. The Daimler representative declined to comment further, the news outlet said.