BERLIN:German car maker Daimler said on Tuesday it will cooperate with China's Geely to build next-generation combustion engines for use in hybrid vehicles.<br /> <br /> Efforts to share development costs come as the growth potential for combustion engines faces the twin threat of the COVID-19 crisis and stricter fuel-efficiency and emission rules.<br /> <br /> "The companies plan to develop a highly efficient modular engine," a spokesman for Daimler said, adding that it would be used in hybrid drivetrains and manufactured in Europe and China.<br /> <br /> Geely declined to comment.<br /> <br /> The modular engine will be used in cars under different marques at Geely and Daimler, a person familiar with the matter said on condition of anonymity as the companies are still in the early stages of developing the engine.<br /> <br /> News of the alliance was a surprise to Daimler's works council at its factory in Untertuerkheim, which specialises in electric and gasoline powertrain assembly.<br /> <br /> "We are speechless. There was not even a discussion about potential alternative manufacturing locations," said Michael Haeberle, the works council chief for Untertuerkheim.<br /> <br /> "We have the ability to build four cylinder engines in Untertuerkheim but there were no talks about it."<br /> <br /> Daimler said German factories will be retooled gradually to add electric drivetrains production.<br /> <br /> Most of the next-generation combustion engines will be made in China, business daily Handelsblatt reported. The alliance with Geely, which owns a 9.69% stake in Stuttgart-based Daimler, means that parts of Daimler's existing partnership with Renault could be pared back.<br /> <br /> A Renault source told Reuters that the Daimler-Geely project does not mean an end of cooperation between Daimler and Renault.<br /> <br /> Citing Daimler sources, Handelsblatt said the Daimler-Geely pact would save the German carmaker a "triple-digit million sum" - implying an amount above 100 million euros ($119 million) and less than 1 billion euros.<gdiv id="ginger-floatingG-container" style="position: absolute; top: 0px; left: 0px;"><gdiv class="ginger-floatingG ginger-floatingG-closed" style="display: none;"><gdiv class="ginger-floatingG-disabled-main"><gdiv class="ginger-floatingG-bar-tool-tooltip">Enable Ginger</gdiv></gdiv><gdiv class="ginger-floatingG-offline-main"><gdiv class="ginger-floatingG-bar-tool-tooltip"><em>Cannot connect to Ginger</em> Check your internet connection<br /> or reload the browser</gdiv></gdiv><gdiv class="ginger-floatingG-enabled-main"><gdiv class="ginger-floatingG-bar"><gdiv class="ginger-floatingG-bar-tool ginger-floatingG-bar-tool-disable"><ga></ga><gdiv class="ginger-floatingG-bar-tool-tooltip">Disable in this text field</gdiv></gdiv><gdiv class="ginger-floatingG-bar-tool"><ga class="ginger-floatingG-bar-tool-edit">Edit</ga><gdiv class="ginger-floatingG-bar-tool-tooltip">Edit in Ginger</gdiv></gdiv><gdiv class="ginger-floatingG-bar-tool ginger-floatingG-bar-tool-mistakes"><ga></ga><gdiv class="ginger-floatingG-bar-tool-tooltip">Edit in Ginger</gdiv></gdiv></gdiv></gdiv><gdiv class="ginger-floatingG-contentPopup"><gdiv class="ginger-floatingG-contentPopup-wrap"><ga class="ginger-floatingG-contentPopup-close">×</ga><gdiv class="ginger-floatingG-contentPopup-frame"><iframe scrolling="no"></iframe></gdiv></gdiv></gdiv></gdiv></gdiv>