Shanghai (ZXZC)- Volvo Cars and Geely Automobile Holdings Limited (Geely Auto) are considering integrating their businesses to form a strong global auto group, which is expected to improve the efficiency of financial and technological synergies between two companies, both automakers announced on Feb. 10 .

The considered combination would preserve the unique identity of the brands including Volvo, Geely, Lynk & Co and Polestar, two companies said.

Besides, the restructured group would get access to the global capital business through going public in Hong Kong, and is intended to be listed in Stockholm subsequently.

A joint working group will be created to hammer out a restructuring plan and report it to their respective boards.

In last October, the Swedish automaker said Geely and Volvo Cars intended to merge their existing combustion engine operations into a stand-alone business in a bid to create a new global supplier that would seek to develop next generation combustion engines and hybrid powertrains. The proposed new business then triggered the industry's speculation over their business combination.

Volvo Cars said the merger business would pave the way for it to focus on the development of its all-electric range of premium cars. For Geely, it was also a beneficial transaction as the planned new entity meant technologically-advanced and efficient combustion engines and hybrid powertrains would be available to Geely Auto, Proton, Lotus, LEVC and Lynk & Co.

Volvo Cars has been under the ownership of the Zhejiang Geely Holding, Geely Auto's parent company, since 2010. For the full year of 2019, the premium carmaker's global sales reached a record 705,452 cars, an increase of 9.8% versus 2018. In China, it boasted a growth of 18.7% with 154,961 vehicles delivered there, a remarkable performance especially amongst the overall downturn in China's auto market. The latest cemented collaboration with Geely is regarded as a measure to face the challenges from the severe market climate which has been further deteriorated by the ongoing spread of new coronavirus. In addition, it is also a typical case for current auto industry which is frequently witnessing companies join hands to handle the fierce competition.