Volvo has announced a joint venture with Geely Auto to develop an all-new vehicle platform.
The new platform will be aimed at the next generation of C-segment vehicles for both companies.
The platform should allow Volvo the freedom to push ahead with its XC40 compact SUV. The company previously told Autocar that it would like to build the model, which would rival the Range Rover Evoque, but that it didn't have a suitable engineering architecture.
Geely Group says the platform will "help achieve synergies through economies of scale and scope in terms of development, testing, and procurement, without the slightest compromise on brand value."
Volvo says the new architecture will not be used to underpin vehicles in an as-yet un-named new brand, which would sit in-between Volvo and Geely.
Expected to underpin smaller models in Volvo's range, the new platform will act as a smaller alternative to Volvo's new Scalable Product Architecture platform.
The SPA platform, first seen on the Volvo Concept Coupé at the Frankfurt motor show, will eventually underpin everything from the S60 up in the Volvo range. It will first be seen on a production car with the new XC90, on sale next year.
A Volvo spokesperson told Autocar: "If you're in the automotive industry today creating a new architecture, you need to create a sustainable model because that is the modern way to reduce costs. The obvious example of this is the MQB platform, and of course we are doing something similar.
"If you stretch an architecture too much you have to compromise - we don't want to do that. To stretch the SPA platform down to the C-segment would mean too many compromises."