Chinese Geely Automobile has signed preliminary agreement with Ford Motor to purchase Sweden-based Volvo, according to Chinese media.

Geely Automobile, one of China's biggest private auto makers, will become the new owner of Volvo Cars, according to China Daily. The Chinese company is said to have has reached a preliminary agreement with Ford Motor Co to purchase its Volvo unit and plans.

Geely aims produce the new model Volvo XC90 in Guangzhou Province's Dongguan City, the National Business Daily writes.

The deal is said to be worth at least $3 billion, according to Jia Xinguang, chief analyst with the Chinese National Automotive Industry Consulting and Development Corp.

Previously, Ford has been said to be seeking about $2 billion for Volvo, less then a third of the prize they paid for the company a decade ago. Ford acquired Volvo in 1999 for $6.45 billion from Volvo AB.

"It's the right time for Chinese firms to make overseas acquisition during the slowdown in the economy," said Jia Xinguang to China Daily.

Representatives of Geely have during the spring been frequent visitors at Volvo's headquarters in Göteborg, south west Sweden, sources said.