About two months ago, BAIC sent its representatives to Germany to bid for Opel and talks between GM and BAIC on the sale of Opel are ongoing, sources say. 

 

Yet sources close to the situation also now say the state-owned Chinese company is seeking to acquire Volvo.  

 

BAIC hopes to snap up either of the two European brands, but not both of them, sources say. 

 

At an industry conference held in Shanghai in November, BAIC's president Xu Heyi told Automotive News China he was very cautious towards bidding for distressed overseas assets. "I don't know whether it is a pie or a pit," he said. 

 

But sources say the Beijing municipal government has encouraged BAIC to acquire foreign brands as it is eager to see the city with a stronger automaker.  

 

Since Guangzhou Automobile Group Corp. acquired the small domestic SUV maker Changfeng Motor Co., BAIC has been the only major domestic Chinese automaker that is not building its own brand vehicles.  Beijing currently runs two joint ventures with Hyundai Motor Co. and Daimler AG.