China's GEELY automaker BUYS Sweden's VOLVO

HONG KONG — Ford Motor Co. reached an agreement yesterday to sell its Volvo subsidiary to a Chinese conglomerate, in the clearest confirmation yet of China’s global ambitions in the auto industry.

Zhejiang Geely Holding Group, based in Hangzhou, agreed to pay $1.8 billion for Volvo, with $1.6 billion in cash and the rest in a note payable to Ford.

Ford paid $6 billion in 1999 to acquire Volvo, leaving the company with a substantial loss on its investment. Ford has shifted its strategy to focus on its core brands and has already sold off other luxury brands, including Jaguar and Land Rover to Tata Group of India for $2.3 billion a year ago.

The purchase of one of Europe’s most storied brands shows how China has emerged not just as the largest auto market by number of vehicles sold in the past year, but also as a country determined to capture market share around the globe.

Zhejiang Geely said it planned to retain production of Volvos in Sweden, but it is expected to build another factory for them in China, most likely near Beijing or Shanghai. Ford already builds small numbers of Volvos for the Chinese market in Chongqing. Most of the vehicles built at that factory are Fords and Mazdas for sale in China.