Formalities for the sale of Ford's Volvo unit to a Chinese automaker have yet to be completed but Chinese observers think the deal will happen.

Ford is still expected to sign an agreement to sell Volvo to China's Zhejiang Geely Holding but chairman Li Shufu said at the opening of the National People's Congress in Beijing: "We haven't reached a final agreement so far - everything is moving as planned."

The purchase price is thought to be around US$2bn with completion by May.

Li said Geely had secured some of the regulatory approval it needed but gave no details.

Geely plans to nearly double Volvo's annual global production with a new factory in Beijing.

Volvo chief Stephen Odell said earlier this week he expected engineering and manufacturing to remain in Europe.

"I'm sure Geely will add manufacturing facilities in China which will boost opportunities in what has become the largest car market in the world," he added.

Zhejiang-based Geely is researching alternative energy cars, but no new products were expected within the next one to two years, according to Li.
 
Odell said earlier this week that global sales in the first two months of this year were up 27% compared to the same period a year ago.

"We still have some downtime in production but we are starting to fill that," he said.

"We have not really seen much benefit from scrappage schemes but the segments of the market in which we compete are showing signs of improvement."

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