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Ford is having trouble offloading its failing Volvo subsidiary but the company is determined to sell and in spite of the tough economic conditions still has several potential buyers. According to latest reports, however, the only potential buyer that has so far placed a bid for the Swedish automaker is China’s Geely.

Swedish newspaper Dagens Industri is reporting that Geely has signed a letter of intent to purchase Volvo from Ford, citing several anonymous sources within the Chinese government. The source revealed that Geely and Ford were still nailing out the details, including the transfer of technology, Volvo’s marketing and market position and possibly layoffs, and that the Chinese automaker hopes to start production of Volvo cars in a new factory in the Guangdong Province of China.

As part of the deal, Geely will reportedly invest up to $10 billion in building the Volvo brand and the first model to be fully designed under the guidance of the Chinese automaker will be the next-generation XC90 due in 2011.

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