Ford has announced that a consortium led by China’s Zhejiang Geely is its preferred bidder for its Swedish car subsidiary Volvo.
The carmaker said it would enter “detailed and focused” negotiations with Geely, although no final decision about Volvo’s future had been taken.
Geely announced last month that it was intending to make an offer for Volvo.
Geely used to make the cheapest cars in China, but it has been moving towards appealing to more affluent customers.
“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 independence,” said Ford’s chief financial officer Lewis Booth.
Although Ford said it would not retain a shareholding after any sale, it said it would continue to co-operate with Volvo “in several areas”.
These would include “component supply, engineering and manufacturing,” said John Fleming, chairman of Ford’s European arm and of Volvo.
For its part, Volvo “welcomed” Ford’s announcement as a “positive step forward”.
Although Ford has not faced the same difficulties as its domestic rivals GM and Chrysler, it has still been forced to sell some of its brands to concentrate on its core US carmaking business.
Last year, it sold Jaguar and Land Rover to India’s biggest carmaker Tata for $2.3bn (£1.4bn at the time).
In 2007, it sold Aston Martin to a UK-led investment consortium.
Source: BBC News