Chinese Hummers and now Chinese Volvos?
Ford Motor Company (NYSE: F) announced today that a consortium led by Zhejiang Geely Group Holding Co. Ltd. is its preferred bidder in the ongoing discussions concerning the possible sale of Volvo Car Corporation.
The confirmation comes after almost a year of press speculation that Chinese companies were interested in the loss making Swedish brand.
Ford said that while it will be engaging in more detailed and focused negotiations with Geely, no final decisions have been made.
“Ford’s objective in our discussions with Geely is to secure an agreement that is in the best interests of all the parties,” said Lewis Booth, Ford Motor Company executive vice president and chief financial officer.
“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, while enabling Ford to continue to focus on and implement our core ONE Ford strategy.
Intellectual property, Volvo engineering and a guaranteed supply of parts to Ford after the sale appear to be the difficult areas that need to be addressed.
Ford said in a statement that it would continue to cooperate with Volvo in several areas after a possible sale. However, it does not intend to retain a shareholding in Volvo.
Booth said “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.”
Ford and Volvo will maintain appropriate communications with key stakeholders, such as Volvo’s employees, unions and the Swedish government, during the ongoing process.