Geely said Friday it had reached a deal with Ford Motor Co. on intellectual-property rights in its bid for the U.S. company’s Volvo unit.
An agreement with Ford would mark a significant step forward in talks between Geely and Ford, which, like General Motors Co., is trying to offload a loss-making Swedish auto unit.
Resolving intellectual-property rights has been a key stumbling block for both U.S. auto makers in efforts to sell overseas brands to potential buyers from China and Russia with ambitious industry-expansion plans of their own.
Geely, one of China’s largest auto makers, said it remained the preferred bidder for Volvo. “Volvo will be able to use Ford’s IPR that is needed for [it] to continue its existing business plans,” it said in a statement.
Through the Volvo purchase, Geely would own the intellectual-property rights to Volvo’s key technologies, including those related to safety and the environment, the Chinese auto maker said.
John Gardiner, a Ford spokesman, said any final agreement would take into account the rights and protection of the engineering, manufacturing and supply relationship between Ford and Volvo.
“No final decisions have been made, but our objective in our ongoing discussions with Geely is to secure an agreement that is in the best interests of all parties concerned,” Mr. Gardiner said.