Geely acquires domestic brand

The parent company of Geely Automobile Holdings Ltd on February 26 bought Chinese special vehicle maker, Zhejiang Zhongyu Automobile Co, as it moves to expand its product portfolio.

Zhejiang Geely Holding Group, which is close to a deal to buy Ford Motor Co's Volvo cars unit, gave no financial details for the purchase of Zhongyu Auto, a small manufacturer in eastern China that also makes premium multi-purpose vehicles.

China is encouraging consolidation and the development of a few national champions in its highly fragmented auto sector, now crowded with more than 100 auto makers including Zhongyu Auto, which has planned capacity of only 25,000 vehicles a year.

Geely, China's 10th-largest car maker, sold about 330,000 vehicles last year.