Geely, the Taizhou-based fridge-maker turned car giant, is apparently the "preferred bidder" for Volvo.
Ford, the owners of Volvo, said it thought Geely "has the potential to be a responsible future owner of Volvo and to take the business forward". It added, however, that "no final decisions have been made".
Geely shares in Hong Kong rose 4.5pc on the news, before falling back to a 2.4pc gain. The company has seen its share price quadruple this year on the hope it will buy the Swedish firm.
As Greg Anderson points out on his blog, this is all very strange. What exactly is a preferred bidder? What value is Ford delivering to its shareholders by anointing Geely before the bid process is finished?
Does it mean there is only one bidder left? Or is Ford trying to coax other potential bidders into making an offer by suggesting that the process is in its final stages?
Certainly Geely appears ready to pay only a fraction of the $6.45 billion that Ford paid for Volvo back in 1999. But then Volvo is loss-making these days.
I’m still sceptical about the deal, however. Back in April at the Shanghai Motor show, Geely executives were talking down the possibility, saying that although they were keen to buy a foreign company, the government was making it hard for Chinese companies to shop abroad. The continuing failure of Sichuan Tenzhong to wrap up its bid for Hummer could indicate that policy is still in force.
I got the overall impression that while Geely was enjoying the attention of being a possible bidder for Volvo, no bid would actually ever make it off the table. The two companies have been dancing around each other for almost a year now, after all.
And while China is keen to be seen as a big player in the car market, actually allowing a Chinese company to buy a firm like Volvo makes little sense.
Geely would benefit from the technology transfer, but no Chinese car maker has successfully run a foreign business. SAIC chose to shut down Rover’s production and also failed at running Ssangyong.
It is difficult to imagine Geely stemming Volvo’s losses while headquartered on the other side of the world. Ford couldn’t do it, after all. There may be rumblings in the media, but don’t hold your breath for this takeover.