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China's Geely says no plans to buy Ford's Volvo brand

SHANGHAI (Reuters) - Chinese car manufacturer Geely Automobile Holdings Ltd 0175.HK has no plans to buy the Volvo car brand from Ford Motor F.N, a Geely spokesman said on Thursday.

“We don’t have plans to buy Volvo as some media have reported,” he told Reuters.

Media reports citing sources had earlier on Thursday said Ford, seeking to raise cash to avoid a bailout by the U.S. government, was in preliminary talks to sell its Volvo car unit to Geely.

A spokeswoman for Ford in China declined to comment.

General Motors GM.N, owner of Saab and currently on life support from the Federal government to avoid bankruptcy, and Ford are trying to sell some of their assets amid a sharp downturn of the U.S. auto market. In January, the U.S. auto market was overtaken by China as the world's largest in terms of sales.

Industry sources say U.S. auto companies have approached a range of potential buyers in China, including SAIC Motor 600104.SS, but deals would be difficult to conclude because of high risks and also as the Chinese market is itself losing steam.

Car sales growth in the country slowed to a single digit rate in 2008 for the first time in at least 10 years, spurring government steps to bolster demand.

Executives at other potential buyers such as Changan Automobile Group, Dongfeng Motor Group 0489.HK and Chery Automobile, had told Reuters they were monitoring the situation.

But they said they were unlikely to rush into any commitment due to the challenge and risk involved in turning around a global brand given the companies’ limited international exposure.

Geely is a mid-sized car manufacturer in eastern China, making mostly small sedans. It owns about 23 percent of Manganese Bronze and 51 percent of a Shanghai-based joint venture with the UK company.

Reporting by Fang Yan; Editing by Jacqueline Wong

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