Gui Sheng Yue, chief executive of Geely Auto, however confirmed that the Chinese carmaker might need the support of a state-owned investment entity to take full control of Volvo because it is too small and doesn't have the financial power to purchase the Swedish unit. Nevertheless, Geely sees Volvo as a great opportunity to step into the European market and thus increase its market share on the continent.
Details on the negotiations remain scarce for the time being, but previous reports indicated that Geely agreed to invest up to $2 billion for Volvo. Furthermore, the company was willing to construct a new plant in China to build Volvos locally and bring a team of Chinese engineers in Sweden to collaborate with their local counterparts.
But Geely is not the only Chinese entity interested in purchasing Volvo. Earlier media reports claimed that BAIC is also looking to snatch the controlling stake in the Swedish carmaker. Additionally, a group of European investors have also been linked to the deal but until now, Geely is credited with the biggest chances to secure Volvo.
Ford already confirmed that it is negotiating with several suitors but a report that came out last month revealed that the US-based carmaker plans to delay the deal until General Motors sells Opel. This way, it could invite the losing bidder to fight for Volvo and thus create competition for Geely.
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