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China's Geely says it has no plan to buy Fiat Chrysler — as FCA stock leaps

HONG KONG — Chinese carmaker Geely Automobile denied media speculation on Wednesday that it planned to make a takeover bid for Fiat Chryslerk Automobiles (FCA), the world's seventh-largest automaker. Geely was one of several Chinese carmakers cited in by Automotive News, which said representatives of "a well-known Chinese automaker" had made an offer this month for FCA, which has a market value of almost $20 billion. "We don't have such a plan at the moment," Geely executive director Gui Shengyue told reporters at an earnings briefing, when asked if Geely was interested in Fiat. He said a foreign acquisition would be complicated, but he did not elaborate. "But for other (Chinese) brands, it could be a fast track for their development," Gui added. However, a source close to the matter said FCA and Geely Automobile's parent firm, Zhejiang Geely Holding Group, had held initial talks late last year, without disclosing their nature. The source confirmed Geely was no longer interested in FCA, noting that the parent company had only three months ago announced its first push into Southeast Asia with the purchase of 49.9 percent of struggling Malaysian carmaker Proton, a deal that also included a stake in Lotus. Geel's denial failed to dent FCA's stock. The price of its Milan-based shares has jumped more than 10 percent to a 19-year high since Automotive News first reported on Monday, citing unnamed sources, that FCA had rejected the Chinese offer as too low. FCA stock on the New York Stock Exchange rose sharply on Monday from $11.60 to $12.38 and on Wednesday was trading at $12.84. FCA declined to comment on Wednesday. FCA Chief Executive Sergio Marchionne has repeatedly called for mergers as a way of sharing the costs of making cleaner, more advanced cars, but he has repeatedly failed to find a partner and retreated from his search for in April, saying FCA would stick to its business plan. He has also spoken of spinning the successful Jeep and Ram divisions off from FCA. Europe's largest carmaker, Volkswagen, and General Motors have both said they are not interested in talks with FCA. On Wednesday, Geely Automobile reported a doubling of first-half profit, above expectations, as cars designed with Sweden's Volvo won over domestic consumers. Volvo is a unit of the Zhejiang Geely group, and has recently announced it will share its technology with Geely.

Volvo debuts new Drive-E four-cylinder engines

Volvo is introducing a new engine family based on its new Drive-E philosophy, which encompasses "all innovations made to reduce the impact on the environment," the automaker says. Less cylinders allows for less environmental impact, so the new engines are all four-pots. They also were designed to pair easily with Volvo's upcoming hybrid drive system, which "will reach power figures in the V8 territory" and play a "dominant part of the top end of [Volvo's] range," says Derek Crabb, Vice President Powertrain Engineering. Volvo also says we can expect "power curves that give exciting drivability compared with engines with more cylinders."
Volvo says some versions of the engine were designed targeting best-in-class fuel economy. There are both gasoline and diesel options, but the latter of which isn't scheduled for US consumption. Instead, the US will be offered two states of tune of the gasoline Drive-E engine for front-wheel-drive vehicles. Some of Volvo's current all-wheel-drive powertrains will remain available in the US until the company has transitioned solely to the new, fuel-efficient inline-fours.

Current Volvo XC90 to live on in China?

The current, long-serving Volvo XC90 might not be going away as soon as we thought - at least not in China. According to word from CarNewsChina, the crossover's production will be moved to Daqing, China, in December and from that point on, be built at Geely's factory. The only available engine will be a 2.5-liter turbocharged five-cylinder.
According to the report, the present XC90 and the imminent next-generation model will both be sold in the market, but the Chinese-made vehicle will be positioned as a cheaper alternative. Geely will also develop a crossover of its own from the platform that should be ready in late 2015.
Volvo plans to launch the new XC90 later this year to replace the aging model, which has been on the market for over a decade. It will ride on the company's new Scaleable Product Architecture platform and will be powered by the automaker's new Drive-E four-cylinder engine family. Hybrid versions will also be available.