The US-led Crown Consortium is confronting China's automaker Geely Automative in its bid to acquire Volvo, the Swedish loss making unit of Ford Motor Co, according to the Financial Times.

The UK-based newspaper said today that the Crown Consortium is led by a former director at Ford, Michael Dingman, who is a turnround specialist and Shamel Rushwin, a former executive with Ford and Chrysler.

Citing sources in the know of the matter, the paper said that the consortium has fully secured financing from private equity groups in the US, but is also seeking additional funding as a backup from Swedish investors in order to retain Volvo in the country.

Crown is talking to these potential investors about taking up to a one-third stake in the consortium.

Citing another source, the Financial Times said that the Crown Consortium's bid is far lower than Geely Automative's, but both potential buyers have said that they would make an additional investment of $3 billion in Volvo.

People close to the sale told the paper that Geely Automative 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.

The only hindrance to the Geely deal was the question of protection of Ford's intellectual property.

In September, US investment banker, Goldman Sachs said it had plans to invest $250 million in Hangzhou-based Geely Automobile Holdings Ltd by acquiring Geely's convertible bonds and warrants. (See: Goldman fund plans to invest $250 million in China's Geely)

Geely plans to use the investment to triple its annual production capacity from the current level of 50,000 units to 150,000 units from its plant in Hunan province, and also acquire auto-related assets from its parent company, Geely Holding Group.

In the same month, Geely Holding Group disclosed its intention to acquire Volvo jointly with local financial institutions. It is believed that the talks have been going on for several months.

Some analysts have expressed doubts about the group's financial strength to make the huge acquisition amounting to approximately $2 billion.

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)

During the Drivetrain acquisition, Geely's chairman Li Shufu told reporters that the company was open to possible overseas deals. He said his company was following the turmoil in the global automobile industry, and studying the restructuring, potential bankruptcies and possible mergers.

"Geely is paying close attention, if there is an opportunity we will participate" in those events, as long as it is in the interests of Geely's shareholders and the company's long-term development, he said.

However, overseas purchasing has drawn warnings from the Chinese government, which said Chinese auto firms still lack the experience in running international brands.

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, the Dearborn, Michigan-based carmaker 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.

But like all other major global automakers, Ford also posted a second quarter loss of $231 million and CEO Allan Mulally is determined to sell Volvo and focus on the company's operation in the US for the moment.