China's Geely Holding is to set up a new joint venture with Volvo Cars to share existing and future car technology, according to a Memorandum of Understanding the two parties signed on July 20.

The 50:50 partnership will enable Volvo Cars, Geely Auto and Lynk & Co - all of which are controlled by Geely Holding – to share technologies via license agreements. The joint venture will be headquartered in China with a subsidiary in Gothenburg, Sweden.

While the technology will be available for use by the three companies, the intellectual property rights will remain with whichever company develops it, according to a Volvo statement.

The three will also cooperate more deeply by commonly sourcing components and cutting procurement costs.

Volvo is to take a minority shareholding in Lynk & Co. Its current shareholders are Geely Holding and Geely Auto.

Hakan Samuelsson, Volvo's president and chief executive, said, "This planned collaboration will strengthen Volvo's ability to develop next generation electrified cars."

Volvo Cars and Geely already share technology, most notably the Compact Modular Architecture platform.

Future modular vehicle architecture platforms and other technologies will be shared and developed based on cost-sharing agreements.

Whichever company leads the development will own the technology and the other group companies will have full access to it through a license, reducing overall development costs.

The collaboration will extend in future to also cover electrified vehicle components such as battery cells, e-motors and charging systems in order to maximize synergies across the group.

Li Shufu, chairman of Geely Holding said: "We will unlock significant benefits across our portfolio by sharing both technologies and next-generation vehicle architectures.

"I am confident these synergies can be achieved while preserving the separate identities and strategic autonomy of our different automotive brands."