A Goldman Sachs Group private equity fund is investing about $250 million in Chinese carmaker Geely Automobile <0175.HK>, a move that could free up capital for Geely's parent to bid on Ford's Volvo unit, the Wall Street Journal reported, citing an unidentified source.

Goldman Sachs Capital Partners' purchase of Geely convertible bonds and warrants would give it an unspecified minority stake in the carmaker, an investment that would be announced on Monday, the newspaper reported, citing a Geely executive.

Goldman Sachs and Geely officials on Sunday were not immediately available to comment on the report. Geely said earlier this month that its parent was considering a bid for Volvo with a local government-backed investment firm.

(1$=6.83 yuan)

(Reporting by Kirby Chien, Editing by Dean Yates)