With Geely now having been able to secure 15 billion Swedish crowns, it appears that it will be successful at finalizing its purchase of Volvo from Ford, according to Swedish business daily Dagens Industri.

Chinese manufacturer Geely needs this much money to complete the deal from Chinese financial institutions and regional government bodies. A source said that the amount is already in the bank account of Geely’s parent company Zhejiang Geely Holding Group. So far, Geely has not made an official statement. Geely stated earlier this week that a deal is pending and that financing remains out of reach. It is reported that Geely has a target by May to complete the deal for Volvo.

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Zhejiang Geely Holding Group, the parent company of Geely Automobile Holdings Ltd., wants to expand its product portfolio further and has set its sights on purchasing Chinese special vehicle maker Zhejiang Zhongyu Automobile Co.

Zhejiang Geely Holding Group is expected to sign a deal to buy Volvo from Ford Motor Co. in the first quarter and to close the deal in the second quarter. So far, no financial details for the purchase of Zhongyu Auto have been announced. Zhongyu Auto is a small manufacturer in eastern China that makes premium special-purpose vehicles based on technology from Daimler AG. Continued after the jump!

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With a 2011 break-even target, China’s Zhejiang Geely Holdings will produce up to 300,000 Volvo cars a year at a new factory in Beijing, according to a source.

A document submitted to regulators by Geely also reportedly revealed that Zhejiang Geely, parent of Hong Kong-listed Geely Automobile, aims to complete the purchase of Ford Motor Co.’s Volvo unit for up to $2 billion by May. Adding this much capacity would nearly double Geely’s current output, which reached 321,900 units in 2009 for the entire group, up 45% from a year earlier. Geely targets that by 2015, it will be able to achieve annual sales of 2 million cars. Analysts say however, that Geely has no experience running a foreign company, making these targets highly difficult to achieve. John Zeng, an analyst with IHS Global Insight, called Geely’s plan to break even next year as being optimistic. Geely has to build a plant first and Chinese buyers might need some time to accept a Volvo that’s made in China. Zeng said that eventually, it will break even but it will take some time.

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At least three major Chinese banks have Geely’s back as it pursues its bid for Ford Motor Co.’s Volvo unit. Geely has already been named the preferred bidder but for the agreement to proceed, Ford had asked about Geely’s financing plans.

Sources say that banking sources are the least of Geely’s problems as so far, Bank of China, China Construction Bank and Export-Import Bank of China had agreed to extend loans to Zhejiang Geely Holding Group. Export-Import Bank of China is a policy lender wholly owned by the Chinese government and directly led by the cabinet. Continued after the jump!

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Things are looking even better for Zhejiang Geely Holding Group, the parent of Geely Automobile, to be given the right to acquire Ford Motor Co.’s Volvo car brand. Members of Geely’s management team are in Sweden this week to discuss their bid, according to a Europe-based spokesman for Geely.

Zhejiang was named last week by Ford as being the preferred bidder. The meeting will take place in Gothenburg and Stockholm this week and will be attended by Ford and Volvo officials, Volvo unions and Swedish government officials. Among the issues that would have to resolved is the transfer of Volvo’s intellectual property rights. A Ford spokesman said that the company remains confident in its ability to protect its secrets because it overcame similar issues during the 2008 sale of Jaguar and Land Rover to Tata Motors Ltd. An insider source had said that Ford’s decision to name Geely as a preferred bidder indicates that considerable progress has been made at this point.

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Analysts say that if Geely Automobile’s parent, Zhejiang Geely Holding, succeeds in its bid to acquire the Volvo Unit from Ford Motor Co., then it would gain a valuable brand but it could take years before profits are seen.

The shares of Geely Automotive have soared ever since news of the bid was announced. Geely, which means “lucky” in Chinese, would benefit much from modern and innovative technologies that can upgrade its cars to tap the rising affluent auto market in China. Chen Qiaoning, an analyst with ABN AMRO TEDA Fund Management, said that the market remains divided on the Geely deal. There are some who believe that if Geely won’t be able to manage Volvo well, then there would be dire consequences. Geely, which had a reputation of making the cheapest cars in China, would benefit from the purchase through the availability of new technology and better brand recognition. The broader market has slipped but Geely’s stock has risen fourfold this year, the highest point being reached last Thursday. This increase can be attributed to Ford’s announcement last Wednesday that Zhejiang Geely Holding Group is its preferred bidder for Volvo.

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