DETROIT (AP) - Ford Motor Co. has picked a consortium led by China's GeelyGroup as the preferred bidder to buy its Swedish Volvo Cars unit,the U.S. automaker said Wednesday.
Ford said the selection signals that it is conducting "moredetailed and focused negotiations" with Zhejiang Geely GroupHolding Co. Ltd. about the sale.
The announcement means that both sides have reached afundamental agreement to sell the storied brand, but details suchas price still must be worked out, according to a person briefed onthe negotiations.
The person, who asked not to be identified because the talks areprivate, said Ford and Geely are "on the same page" about sharingkey technology and other items, but no definitive sales agreementhas been signed.
Ford, based in Dearborn, Mich., acquired Volvo in 1999 for $6.45billion from Volvo AB, and for 10 years the companies have sharedsafety and other technology. For instance, Ford's flagship familysedan, the Taurus, is based on Volvo underpinnings.
Any agreement would included details about sharing intellectualproperty rights and engineering, the person said.
Ford has wanted to unload Volvo since last year to raise cashand focus its efforts on three core brands: Ford, Lincoln andMercury.
If the sale goes through, it would be another step in the U.S.auto industry's retrenchment from global operations, and anotherinvestment in them by a Chinese company.
Earlier this month, General Motors Co. sold its rugged Hummerbrand to construction machinery maker Sichuan Tengzhong HeavyIndustrial Machinery Corp. The sale awaits regulatory approval.
GM also sold its Saab brand to Swedish specialty automakerKoenigsegg Automotive AB, which has a Chinese partner, and it isselling control of its European Opel unit to Canadian and Russianinterests. That deal is still in complex talks with Europeangovernments.
Last year, Ford sold its Jaguar-Land Rover brand to India's TataMotors Ltd. for $1.7 billion. It took roughly three months from thedate that Tata was announced as the preferred bidder for that dealto close.
Matts Carlson, an automotive analyst at Sweden's GothenburgManagement Institute, said a deal between Ford and Geely would fitvery well with both companies' strategies and follows the trend ofautomotive ownership moving east.
"We now see the Chinese as joint owners of Saab, we see theChinese probably acquiring all of Volvo. We have previously seenIndian Tata buying Jaguar, so an entirely new world map is about tobe drawn up," he said.
Volvo Cars welcomed the Geely announcement, spokeswoman MariaBohlin said. "It's positive that it has been confirmed that there'sa preferred bidder," Bohlin said.
Carlson expects Volvo production for U.S. and European marketsto remain in Sweden and get a boost from the new ownership. Hedoesn't think Chinese ownership will hurt the Volvo brand.
"There is a humbleness from the Chinese that they actually don'tknow international, global auto development and production ... so Ithink they will separate Volvo and give it special treatment as abrand," he said. "Geely has much more to learn from Volvo than theother way around."
Geely, based in Hangzhou, China, said last month that it wasconsidering a bid for Volvo Cars with an unnamed investmentpartner. The automaker said it has unspecified support from Chinesebanks to fund the deal.
Geely is one of China's leading domestic automakers, and wasamong several Chinese companies that have shown interest in Volvoand other European car companies. The Chinese are eager to improvetheir competitiveness by acquiring foreign brands that might helpthem improve their technology and expand into overseas markets.
"Volvo's current factories, research center, trade unionagreements and sales network will remain," Geely said in astatement, adding that it would expand Volvo's sales network andpurchasing in China.
An independent management team would be formed, and theheadquarters would remain in Goteborg, Sweden, the statementsaid.
"If the final agreement is reached, Geely will uphold andstrengthen the traditional position of Volvo as a world brand, andwill continue to promote the global reputation of the top brand inthe field of safety and environmental technology," Geely Groupboard Chairman Li Shufu said.
Associated Press Writer Malin Rising in Stockholm contributed tothis report. AP Business Writer Joe McDonald reported fromBeijing.
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