Ford Motor is negotiating a possible sale of its Swedish subsidiary Volvo to its Chinese partner Changan Automobile Group, reported the business daily National Business Daily on Tuesday, citing unnamed sources within the Chinese company.
According to the report, Changan’s head Xu Liuping discussed this with Ford and Volvo at last month’s auto show in the Chinese city of Guangzhou. Changan is one of the six largest Chinese automotive groups. Ford operates a joint project in China with Changan’s unit Chongqing Changan Automobile Co, which produces Ford Focus mid-size models. After the global crisis forced them to seek assistance from the U.S. government to prevent the collapse of the industry, American automotive giants Ford, which owns Volvo, and General Motors, owner of Saab, decided to sell these parts of their business. Industry sources claim that they have approached several Chinese companies so far, but assess that reaching an agreement will be difficult given the risks involved due to the strong slowdown affecting both the American and Chinese markets.
The Chinese group Dongfeng Motor Group Co is closely monitoring the situation with the Detroit struggling automotive giants, but one source directly familiar with the situation told the Reuters news agency last week that it is still unclear whether they will be interested in purchasing any assets. The third struggling American automotive giant Chrysler separately reported a halt in negotiations regarding possible cooperation with the largest independent Chinese car manufacturer Chery Automotive Co, citing the global economic slowdown as the reason. Chery, which secured a $1.45 billion loan from the China Import-Export Bank this week, according to the company’s head Yin Tongyao, is not interested in purchasing assets of the American automotive industry but intends to invest the obtained funds in improving the quality of its own products. (H)
