Ford agrees in principle to sell Volvo to China's Geely Auto

Officials at Ford Motor Company have recently announced that they expect to sell the Volvo car brand to China's Zhejiang Geely Holding Group by the first quarter of 2010, which may attract attention to used Volvo models in New Jersey.

The value of the deal is expected to be estimated at $1.8 billion, which pales in comparison to the $6.45 billion that Ford paid to purchase Volvo in 1999, according to Reuters.

In a statement, authorities at Ford said that the sale "would ensure 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 its core ONE Ford strategy," according to AutoWeek.com.

Ford, the only U.S. automaker to avoid bankruptcy and a government bailout, may use the money to accelerate debt repayment in an effort to return to profitability by 2011.

Meanwhile, Li Shufu, the founder of the Zhejiang Holding Group, has announced that the Swedish auto brand will be left intact if the sale is finalized.

"If the deal succeeds, nothing will change for Volvo, except the boss turns to Li Shufu," Li told the official Xinhua news agency, quoted by Reuters. "Volvo and Geely will be two independently-managed brands."

Ford has said that there is still a significant amount of work to be done before the sale is finalized, including Geely securing financing and having the Chinese government sign off on the deal. Ford does not plan on retaining a shareholding in Volvo after the deal is finalized.

The possibility of the Swedish automaker changing hands may increase the appeal of used Volvo models in New Jersey.