Geely will join the likes of independent vehicle manufacturers Magna Steyr and Valmet by establishing a new contract manufacturing division to build cars and parts, as well as offer consulting services, for other companies.

Geely isn't going it alone, though. The Chinese auto giant said Wednesday it will establish a 50:50 joint venture with Foxconn, a leading contract manufacturer of electronic goods whose clients include the likes of Apple, Amazon, Microsoft and Sony.

The new joint venture will enable Geely to increase utilization rates at its plants while providing established production sites for smaller companies looking to launch vehicles, such as startups. Electric-vehicle startup Fisker for example has selected Magna Steyr to build its upcoming Ocean SUV.

The joint venture will also enable Foxconn to continue its expansion into the automotive space. The Taiwanese company last fall unveiled a modular EV platform and last week invested in troubled EV startup Byton.

One of the first customers of the Geely-Foxconn joint venture could be Chinese tech giant Baidu which on Monday said it planned to launch an EV company, in which Geely will be a strategic investor. Baidu's EVs will use a modular platform developed by Geely.

It's possible the joint venture could also end up building vehicles for some of Geely's brands. In addition to its own eponymous brand, Geely owns Volvo, Polestar and Lynk & Co, as well as controlling stakes in Lotus and Proton. It also owns about 9% of Daimler.