Currently reading: Update: Geely 'to buy Volvo'
Chinese media reports news - but Ford rubbishes story

Ford has rubbished reports that Chinese car maker Geely has reached a preliminary agreement to purchase Volvo.

Ford issued a statement which read: "An announcement related to the sale of Volvo Car Corp. would only come from Ford Motor Company.

"As of today, neither Ford Motor Company nor Volvo Car Corporation in Sweden has made any announcement regarding the sale of Volvo. Reports of such a sale by any media outlet are speculative and, therefore, are not accurate."

The Chinese media has been reporting that Geely will produce a new Volvo model in China's Guangzhou Province as part of a deal. Speculation suggests it would introduce the XC90 to China initially, and invest $10 billion (£6 billion) in Volvo globally.

Volvo was bought by Ford for US$6.49 billion (£4 billion), and is not expected to be sold for less than $3 billion (£1.8 billion) according to analysts.

The Chinese media is reporting that representatives of Geely, already one of China's biggest private auto makers, have already visited Volvo's headquarters.

However, it is known that several prospective buyers have made similar trips, and Ford is not yet believed to have narrowed down its shortlist of potential buyers to a single company.

Geely sold 101,171 cars between January and May, a jump of 57.8 per cent year on year.

This has been credited to the fact that Geely has tapped into smaller Chinese towns after the government handed out subsidies to encourage people in rural areas to buy cars.

The China Passenger Car Association predicted this week that vehicle sales in the country would grow 17 per cent this year from 2008, outpacing the 6.7 percent rise last year.

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