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LONDON - Ford named a consortium led by China's Zhejiang Geely Group Holding Co. as preferred bidder for its loss-making Swedish unit, Volvo Car Corp., but said more detailed talks were needed before any final agreement.
The announcement moves the long-running sale, which began in December, closer to a conclusion, and signals that intellectual property concerns, which threatened to derail the deal last week, may have been overcome.
But it could be months before a final deal is reached -- Ford named Tata Motors as preferred bidder for Jaguar and Land Rover in January 2008, and reached a final accord in March of that year.
Ford did not disclose a possible sale price, but media reports have put it closer to $2 billion than the $6.45 billion it paid for Volvo in 1999.
Sources familiar with the matter have said a U.S.-led group including former Ford director Michael Dingman, the Crown consortium, and Beijing Automotive Industry Holding Corp (BAIC) were among other potential suitors.
In a statement on Wednesday, Ford said it would engage in "detailed and focused" negotiations with Geely and while it would continue to cooperate with Volvo after a sale, it did not plan to retain a shareholding.
Lewis Booth, Ford Motor Company chief financial officer said: "There is much work that needs to be completed in the more substantive discussions that are agreed to take place. We have no specific timeline to conclude the discussions." Wednesday's agreement is not with Geely's listed Hong Kong subsidiary Geely Automobile Holdings.
(Editing by Douwe Miedema)
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