Geely bids for money-losing Volvo

• Source: Ce.cn
• [17:56 September 02 2009]
• Comments

China's Geely Automotive has submitted the only concrete bid so far for Ford Motor-owned carmaker Volvo Car Corp, a Swedish business newspaper reported, citing an undisclosed source.

The US carmaker put money-losing Volvo Cars up for sale in December last year in order to cut costs and raise cash in the face of plunging industry-wide auto sales. The firm said in July it was in discussions with a number of parties about the car maker's future.

An announcement on which suitor Ford had selected to initiate final takeover negotiations is expected some time next month, Swedish business daily Dagens Industri reported.

"It is necessary if the deal is to be completed before the turn of the year, which Ford has set as a target," the newspaper cited a source involved in the sales process as saying.

A Volvo Car Corporation spokeswoman declined to comment on the report.

Geely's spokesman was also not reachable for comment yesterday. An insider at Geely told China Daily that executives in the company had signed confidentiality agreements on any potential sale, indicating a deal was on the cards.

However, Ford Motor (China) Ltd's public relations manager Ouyang Lingfang said the company had no updated information about any sale of Volvo.

"Ford has concluded that the Volvo brand will likely be sold, which is reflected in the company's 'held for sale' accounting status," China Daily was told in an email statement from Ford. "It is premature to discuss pricing, timing or potential bidders."

Jia Xinguang, chief analyst with the Chinese National Automotive Industry Consulting and Development Corp, said: "It's still too early to say that the potential acquisition of Volvo by Geely is beneficial or detrimental, as Geely's chairman Li Shufu never toes the corporate line. But as Geely is ambitious to enter the premium car segment, acquiring Volvo's brand and assets as well technologies is a shortcut."