Ford Motor Co, seeking to raise cash to avoid a federal bailout, is in talks to sell its Volvo Car unit to China’s Geely Automobile Holdings Ltd, according to three people familiar with the discussions.
Ford probably will get less than the $6.4 billion it paid for Sweden-based Volvo in 1999, said one of the people, who declined to be identified because the preliminary talks are confidential. Ford has also approached China’s Chery Automobile Co. and Chongqing Changan Automobile Co, the people said.
Dearborn, Michigan-based Ford lost a record $14.6 billion last year and is trying to avoid asking for government loans to survive as US auto sales plunge to the lowest level in almost 27 years. Geely founder Li Shufu, 45, may want to buy Ford’s last European luxury brand after the addition of sedans to the Chinese automaker’s range of low-cost compacts helped boost profit “significantly” last year.
“Whether it can consummate into a deal is a big question,” said Alice Chong, an analyst at CIMB-GK Securities. Buying Volvo “would help Geely break into new markets and get better technology, but Geely may have to suffer short-term losses as sales in Europe and the US are collapsing.”
