Ford is in talks with the Shanghai Automotive Industry Corporation, China’s biggest car-maker, in a desperate attempt to sell its prestigious Volvo brand.
A source close to the American motor giant said it recently made a second approach to SAIC, which already owns the rights to the MG car marque. Earlier talks in the summer faltered over price. Ford, which bought Volvo for £4.4billion in 1999, is said to be hoping the sale will fetch £4 billion.
The disposal would send an important signal to the US Congress that Ford is taking major action to restructure its business in return for a massive cash injection.
‘Now that Ford is in dire straits this would be a good opportunity for SAIC to snap up Volvo on the cheap,’ said the source.
‘The price has dropped considerably since seeking a sale in the summer.’
Ford, Chrysler and General Motors are begging for a government lifeline of £23.1billion amid harsh trading conditions.
The US Congress will meet this week to evaluate the situation, with all three
of the car giants’ futures at stake.
Aaron Bragman, a car industry analyst with economic forecaster IHS Global Insight, said that though the companies had agreed to accept a significant measure of government control, including restructuring, any aid would not affect the sale of Volvo, which has 105 dealerships in the UK.
‘The sale of Volvo has become part of the conditions of Government assistance,’ he said.
A spokesman for Ford, which is being advised on the deal by financial services firm JPMorgan Chase, confirmed that the company was in talks with a Chinese car-maker, but declined to name SAIC.
A source at SAIC declined to comment. It is understood that Ford is also in talks with other potential bidders for Volvo, the last remaining brand in its premium auto group that had included Jaguar, Aston Martin and Land Rover.
The bidders could include Indianbased Tata Motors, China-based Dongfeng Motor Group and South Korea-based Hyundai Motor, as well as private equity firms such as Texas Pacific Group.