Automaker Zhejiang Geely said it is teaming up with Chinese regional asset manager Daqing State Asset Operation in its planned US$1.8bn acquisition of Volvo from Ford.

The Daqing investment group would become a minority owner of the company in what would be China's biggest ever overseas auto purchase.

The exact size of the stake taken by Daqing and financing issues will be revealed once the deal closed, said Geely’s Swedish spokesman, Anders Fogel, although Zhejiang Geely will be Volvo's controlling shareholder.

Zhejiang Geely signed a deal with Ford in March to buy Volvo. The investment group manages state owned assets in the Daqing region in northern China and news of its involvement fuels speculation over the location of a new plant to build Volvos in China, although Fogel declined comment on this.

Hong Kong-listed Geely Automobile said earlier this year it had no plans to raise money to help finance the purchase by its parent of the Sweden-based carmaker, which last made a full-year profit in 2005.

The deal is planned to close in the third quarter. A new Chinese plant would help boost the Swedish premium brand in the fast-growing Chinese market.

The Swedish carmaker lost money in recent years and cut thousands of jobs in an attempt to regain profitability. However, Ford reported that Volvo had swung to a US$49m operating profit in the first quarter of this year.