Volvo may be sold to Chinese automaker
Ford Motor Co. said a consortium led by Chinese automaker Zhejiang Geely Holding Group Co. is the “preferred bidder” for Ford’s Volvo unit.
Ford said that no final decision had been made on a sale, but that it would be “engaging in more detailed and focused negotiations with Geely,” one of the 10 biggest automakers in China.
“Any prospective sale would have to ensure that Volvo has the resources, including the capital investment, necessary to further strengthen the business and build its global franchise.”
Booth added that “there is much work that needs to be completed in the more substantive discussions that are agreed to take place. We have no specific timeline to conclude the discussions.”
A deal between Ford and Geely would be the latest in a series of moves by Chinese companies to invest in high-profile car brands.
Earlier this month, General Motors Co. reached an agreement to sell its Hummer SUV unit to Sichuan Tengzhong Heavy Industrial Machinery Group. That deal is awaiting regulatory approval by the U.S. and Chinese governments.
In addition, Swedish automaker Koenigsegg Automotive is buying GM’s Sweden-based Saab unit with the help of a Chinese partner.
Ford, based in Dearborn, Mich., said it would continue to cooperate with Volvo “in several areas” after a sale, but has no intention of retaining an ownership stake in the company.
Ford's stock was down 43 cents to $6.90 in late trading on the New York Stock Exchange.
“Volvo’s current factories, research center, trade union agreements and sales network will remain,” Geely said in a statement, adding that it would expand Volvo’s sales network and purchasing in China.
An independent management team would be formed, and the headquarters would remain in Goteborg, Sweden, the statement said.
Geely was rumored as a possible bidder for Volvo in February, but the company said it wasn’t interested in buying the Swedish auto company, which is known for its pioneering safety technology. But Geely, based in Hangzhou, China, apparently had a change of heart, saying last month that it was considering a bid.
Ford bought Volvo in 1999 for $6.45 billion as part of its strategy of building a stable of up-market foreign auto brands. Ford began dismantling the Irvine-based group in 2007 so it could focus financial resources on its core Ford, Lincoln and Mercury brands, eventually selling off Aston Martin, Jaguar and Land Rover.
-- Martin Zimmerman
Photo: A Volvo S80L on display at an auto showroom in Beijing.
Credit: Liu Jin / AFP/Getty Images