Team to handle '09 sale of Volvo

Ford Motor Co. has set up an internal task force to manage the sale of its Swedish Volvo brand and charged it with putting together a deal by the end of the second quarter, according to people familiar with the situation.

The group -- codenamed "Project Nile" -- already is in discussions with more than one Chinese automaker, though sources stressed that those talks are at an early stage. Senior executives at Ford have ordered the team to complete the sale by the end of the year.

Ford would not comment, but Charles Chesbrough, senior economist at CSM Worldwide, said it is not surprising that a Chinese automaker would want Volvo.

"It's an opportunity to get into the luxury car market quickly," he said. "This would immediately put them on the map."

It also would give a Chinese manufacturer access to Volvo's global distribution network.

Perhaps most importantly, Chesbrough said, it would help address the perception that Chinese vehicles are unsafe.

"That's probably been the Achilles' Heel of Chinese vehicles," he said. "Buying Volvo, which is known for its safety, is one way to deal with that."

Volvo has been an important asset for Ford. But Ford now needs money to restructure its North American automobile business. CEO Alan Mulally also is keen to focus the company on fixing its core Blue Oval brand.

Several Chinese automakers have been rumored to be interested in Volvo. They include Geely Automobile Holdings Ltd. and Ford's Chinese joint-venture partner, Changan Automobile Group.

On Thursday, Geely Chairman Li Shufu told reporters in Beijing that the company has no plans to buy Volvo.

A day earlier, Ford of Europe CEO John Fleming told journalists at the Geneva Motor Show that a sale of Volvo is likely to take some time, given the prevailing economic environment.

You can reach Bryce Hoffman at (313) 222-2443.