Chinese manufacturer Geely is inching its way to take over Volvo from Ford and a report in the Wall Street Journal is saying that in fact, it has emerged as the leading contender. Geely's bid is estimated to be worth $2.5 billion, a bid that Ford and outsiders consider much higher than was expected for Volvo.
In the past few years, Volvo was reported to have lost more than $1bn. While it seems that the proposal is too good to be true, there is one sticking point.
Geely is asking to take on only Volvo's assets, such as its safety technology and factories. Geely does not want to be involved in any post-Ford restructuring process, taking on pension debt or unwanted inventory.
Considered crucial to the deal is Volvo's technology. Ford is believed to be hesitating since the brand would then be a rival in Europe and Asia. Last August, Ford's chief financial officer Lewis Booth said that Ford expects a pretty long process due to the environment.
He explained that there is no explicit timetable and that talks are ongoing with interested parties. Meanwhile, Ford CEO Alan Mulally wasn't keen on sharing details. The most that he could say was that talks to sell Volvo were progressing.