China's Geely is 'preferred bidder' in Volvo sale

US auto giant Ford said Wednesday that China's largest independent carmaker Geely Automobile is its "preferred bidder" in talks over the sale of Swedish unit Volvo.

"Ford's objective in our discussions with Geely is to secure an agreement that is in the best interests of all the parties," said Ford's chief financial officer Lewis Booth in a statement.

"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," Booth said.

"Ford believes Geely has the potential to be a responsible future owner of Volvo and to take the business forward while preserving its core values and the independence of the Swedish brand," he said.

Booth added that "much work ... needs to be completed" and there was "no specific timeline" for concluding talks.

Ford said it did not intend to retain a shareholding capacity in Volvo once a sale is made.

John Fleming, chairman of Ford's European operations, including Volvo, said however that "any sale also would need to take into account the significant connections between Ford and Volvo in terms of continuing component supply, engineering and manufacturing."

Volvo CEO Stephen Odell said he and the iconic Swedish firm's management team welcomed the development as a "positive step forward."

"At Volvo, we are continuing to keep our attention firmly fixed on engineering and building great Volvo cars, to reduce our cost base and to return the business to sustainable profitability at the earliest possible opportunity," said Odell in statement released by Ford.

Geely Group, one of China's largest privately owned carmakers, is the latest Chinese firm to eye expansion into overseas markets as competition at home intensifies.

Little-known Sichuan Tengzhong Heavy Industrial Machinery signed a tentative agreement with General Motors in June to buy the Hummer nameplate as the ailing US automaker sought to dispose of non-core assets.

In July, state-run Beijing Automotive Industry Holding said it had planned to buy GM's Opel unit, though the two failed to reach agreement because of intellectual property rights concerns.

Saab in February filed for bankruptcy protection and its troubled owner General Motors announced it would cut the Swedish carmaker loose as part of a vast restructuring plan, saying at the time that it wanted Saab to be independent by 2010.

Saab has made a profit only once since GM bought a 50 percent stake in the company nearly 20 years ago and has continually struggled to draw customers to show rooms.