Ford agreed to sell its Volvo unit to a Chinese automaker group Sunday, marking the most significant push by a car company in China to tap overseas markets.
China's Zhejiang Geely Holding Group will pay the U.S. auto giant $1.8 billion for the Swedish car brand, which will give the company cachet in the domestic market and a foothold in Europe.
China surpassed the United States last year as the top auto market, but its domestic car manufacturers faced an uphill battle acquiring brand awareness and technology overseas.
The privately owned Geely was ranked 11th in total sales last year in China and will benefit from Volvo's research center and reputation for high safety standards.
The Chinese company will allow Volvo to operate largely independently. Volvo will keep open its manufacturing plants in Sweden and Belgium while looking to open facilities in China.
"China, the largest car market in the world, will become Volvo's second home market. Volvo will be uniquely positioned as a world-leading premium brand, tapping into the opportunities in the fast-growing China market," said Li Yizhong, China's minister of industry and information technology, who, along with Geely Chairman Li Shufu, attended the signing ceremony at Volvo's headquarters in Goteborg, Sweden.
Ford bought Volvo in 1999 for $6.45 billion. But it struggled to guide the brand toward profitability as the U.S. auto industry fell into decline. It began shopping Volvo in 2008. By October 2009, Geely was named the preferred bidder, and the sides had been negotiating since.