Ford Motor Co. and Zhejiang Geely Holding Group (Geely) have reached a general agreement on the terms of a sale that would see Ford's loss making Volvo unit sold to the Chinese automaker. An initial agreement is set to be signed in the first quarter of 2010, with the transaction complete in Q2.
Ford said in a statement that the sale, "would ensure Volvo has the resources, including the capital investment, necessary to further strengthen the business and build its global franchise, while enabling Ford to continue to focus on and implement its core ONE Ford strategy."
While a general agreement has been reached, some details still need to be worked out and Geely is still working to secure funding from the Chinese government. Ford has said that it does not intend to keep a stake in Volvo once the sale is completed.
The sale of Volvo would mean the complete dismantling of Ford's premium group of automaker, which at once point also included Aston Martin and Jaguar Land Rover. It is thought that the sale of those entities helped Ford avoid filing for bankruptcy protection.
Meanwhile, rival American automaker General Motors has had far less luck in selling off its brands, with sales of both Hummer and Saab pending (but constantly in doubt), while the domestic Saturn brand is now scheduled to be eliminated after a deal to sell it to the Penske Automotive Group fell through.
More: Report: Ford, Geely Reach Agreement on Sale of Volvo