Ford Motor Company said yesterday that a consortium led by Zhejiang Geely Group Holding is its preferred bidder in the ongoing discussions concerning the possible sale of its Swedish unit Volvo Car Corporation.

Ford said that while it will be engaging in more detailed and focused negotiations with Geely, no final decisions have been made.

Ford and Volvo will maintain appropriate communications with key stakeholders, such as Volvo's employees, unions and the Swedish government, during the ongoing process, said the Dearborn, Michigan-based carmaker.

''Volvo's management team welcomes today's announcement as a positive step forward,'' Volvo CEO Stephen Odell said. ''At Volvo, we are continuing to keep our attention firmly fixed on engineering and building great Volvo cars, to reduce our cost base and to return the business to sustainable profitability at the earliest possible opportunity.''

This month, it was reported that a US-based Crown Consortium led by turnround specialist and a former Ford director, Michael Dingman and Shamel Rushwin, a former executive with Ford and Chrysler had also entered the fray to bid for Volvo. (See: US consortium rivals Geely in bidding for Volvo: report)

It was rumoured that Geely had offered more than $2 billion for Volvo and the Crown Consortium's bid was far lower than Geely's, but both potential buyers have said that they would make an additional investment of $3 billion in the Swedish car company.

It was also reported that Geely was the more likely choice for Ford since it has made a larger bid, but Volvo could go to Crown Consortium if the US carmaker failed to reach a deal with Geely on protection of Ford's intellectual property.

Zhejiang-based Geely is one of China's largest independent carmakers, and the first Chinese auto maker to make an overseas acquisition during the financial crisis.

In March, the Chinese automaker signed an agreement to buy troubled Australian car parts maker Drivetrain Systems International Pty Ltd for an undisclosed sum. (See: China's Geely buys bankrupt Australian parts maker)

''Ford's objective in our discussions with Geely is to secure an agreement that is in the best interests of all the parties,'' said Lewis Booth, Ford Motor Company executive vice president and chief financial officer.

''Ford believes Geely has the potential to be a responsible future owner of Volvo and to take the business forward while preserving its core values and the independence of the Swedish brand. But there is much work that needs to be completed in the more substantive discussions that are agreed to take place. We have no specific timeline to conclude the discussions,'' he added.

While Ford would continue to cooperate with Volvo in several areas after a possible sale, Ford said it does not intend to retain a shareholding in Volvo.

Volvo will be the last European brand that Ford will be hiving off after the US carmaker sold Aston Martin to investment group led by British auto racing champion David Richards in 2007 and the UK iconic brand, Jaguar Land Rover to Tata Motors in 2008.

Ford did not take the US government bailout even though it suffered its worst loss in its 105 year history, when it lost $5.9 billion in the fourth quarter of 2008 and $14.6 billion in the same year.

Geely is one of the Chinese car makers that have considered the acquisition of struggling overseas counterparts during the global financial crisis as they strive to secure advanced technologies and access to new markets.

However, overseas purchasing has drawn warnings from the Chinese government which said Chinese auto firms still lack experience in running international brands and also lack capital since Chinese banks shirk to fund private companies but dole out billions of dollars to state owned enterprises for overseas investments and acquisitions.

Analysts have doubts whether the group has the financial strength to make the huge acquisition costing approximately $2 billion and an additional investment of $3 billion in Volvo.

''Any prospective sale would have to ensure that Volvo has the resources, including the capital investment, necessary to further strengthen the business and build its global franchise, while enabling Ford to continue to focus on and implement our core ONE Ford strategy,'' said Booth.

Little-known Sichuan Tengzhong Heavy Industrial Machinery signed a sale deal with General Motors this month to buy the Hummer brand from ailing General Motors, which is seeking to dispose of non-core assets. (See: GM finalises Hummer sale deal with China's Tengzhong)

In July, state-run Beijing Automotive Industry Holding said it had planned to buy GM's Opel unit, though the two failed to reach agreement because of intellectual property rights concerns.