Geely is one of three potential buyers of Volvo, which was purchased by Ford in 1999 and put up for sale in December last year. The others are American consortium Crown and the Swedish consortium Jakob.
Volvo Cars welcomed the announcement, spokeswoman Maria Bohlin said. "It's positive that it has been confirmed that there's a preferred bidder," Bohlin said.
Volvo cars has its largest plant in Gothenburg on the West coast of Sweden. Sweden's car industry accounts for 15 percent of the country's exports