In an effort to raise much needed cash, Ford is looking for a buyer for its Volvo unit. The Wall Street Journal reports that Chinese automakers Geely, Shanghai Auto and Chongqing Changan are expected to express interest.
Geely, a private firm listed in Hong Kong, recently announced that it hit its sales target of 225,000 cars in 2008, with domestic sales up by nearly 12% and exports up by 80%. I cannot find any announcements on Geely's earnings yet, but on the surface, it looks like they've had a pretty good year.
The other two firms, Shanghai and Changan, are both SOEs owned by the city governments of Shanghai and Chongqing, respectively. Both recently announced pretty big hits to earnings in 2008.
Shanghai Auto will be taking a big loss on its 51%-owned Ssangyong unit in Korea which recently declared bankruptcy.
Changan, which will also announce a significant downturn in earnings, already has a joint venture with Ford, so it may have a slight insider's advantage.
Volvo presents an interesting potential acquisition for a Chinese automaker. Its cars receive high ratings for safety and quality -- two issues that have until now prevented Chinese auto firms from exporting to that holy grail of auto markets, the United States.
While Geely might be expected to have an advantage due to its successful record in 2008, we should not be terribly surprised if Shanghai or Changan, backed by their respective governments, manage to pull together stronger bids.
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UPDATE: China Car Times offers more details on this story here.
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