Ford has named Chinese car maker Geely as its preferred bidder for Volvo.
However, it could be months before a definitive agreement is signed because detailed agreements on a range of issues including intellectual property remain to be resolved.
A Ford insider stressed to Autocar that the naming of Geely is only the beginning of the negotiation process, and has quelled speculation that a deal could be completed by the end of the year.
"There's no timeline pinned down," he said. "We are still concentrating on getting the right agreement, rather than trying to conclude an agreement.
"What today's announcement means is that we think Geely has the potential to be a responsible owner of Volvo, which means respecting its position and being able to add capital investment to grow and develop that position."
Lewis Booth, Ford Motor Company executive vice-president and chief financial officer, said in a statment, “Ford’s objective in our discussions with Geely is to secure an agreement that is in the best interests of all the parties.