China’s Geely to buy Volvo Cars: report

China's Geely to buy Volvo Cars: report
Chinese automaker Geely has reached an initial agreement with Ford for the purchase of Volvo Cars, according to Chinese media reports.

Citing a report published on Wednesday in the National Business Daily, the Shanghai Daily newspaper reported on Thursday that Geely Automotive Holdings plans to buy Volvo and produce a new model of the traditional Swedish brand in China’s Guangzhou Province.

As a part of the deal, Geely plans to start production of the new Volvo XC90 in Dongguan City in what is seen as a major step forward in the Chinese company’s bid to expand into the global auto market.

Terms of the deal were not disclosed, but Jia Xinguang, an analyst with the Chinese National Automotive Industry Consulting and Development Corporation reckons that Volvo would not be sold for less than $3 billion, the Shanghai Daily reports.

Ford purchased Volvo Cars in 1999 for around $6.5 billion.

Geely representatives were not available for comment, according to the Shanghai Daily.

A Volvo spokesperson told the TT news agency on Thursday that the company had no knowledge of any agreement to sell the Swedish automaker to Geely.

“Ford is in charge of the sale. We don’t know anything here,” said Volvo’s Maria Bohlin.

Greely Deputy CEO Daniel Dai also denied the report, telling Sveriges Radio (SR) that his company is too small to buy Volvo Cars.

According to Dai, the information about the alleged deal is mere speculation.

“We’ve already said three times previously that we aren’t involved in this project,” he told SR.

John Gardiner, a spokesperson for Ford Europe’s based in Germany also dismissed the rumours.

“This is just speculation from the market. We neither confirm nor deny these speculations,” he told the TT news agency.

“We continue to discuss Volvo’s future with a number of interested parties.”

However Gardiner refused to name any potential buyers or say how many had a continued interested in purchasing Volvo.

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