The parent of Geely Automobile was tagged as the preferred bidder by Ford and aimed to buy the U.S carmaker's Volvo unit outright, Xinhua news agency reported, quoting Geely spokesman Yuan Xiaolin.

The report said Geely would obtain Volvo's key technologies and intellectual property through the acquisition and would also be eligible to use some Ford technologies held by Volvo, including those relating to safety and environmental protection.

Intellectual property rights have been seen as a key issue hindering Chinese carmakers from taking over struggling overseas automakers.

China's Beijing Auto cited intellectual property as the reason behind its failure to reach a deal with General Motors over its Opel unit in July.

A number of Chinese carmaker are keen to break into foreign markets and are aggressively developing their own brands while moving beyond traditional offerings in the small, low-priced car segment into more upmarket vehicles.