Ford Motor signed a $1.8bn deal to sell its Volvo brand to Geely yesterday in a move seen as emblematic of the shift in the global car industry's centre of gravity from the US and western Europe to China.

The transaction, signed in Sweden yesterday, will see Zhejiang Geely Holding Group, the parent of the Chinese carmaker, acquire 100 per cent of Volvo and its assets. Geely said the deal would nearly double its sales to 600,000 in five years, largely by building market share in its home country.

The deal marks the largest acquisition of an overseas carmaker yet by a Chinese company, and is China's biggest foray into ownership of a big luxury brand. Ford and Geely said they expected the deal to close in the third quarter of this year, pending regulatory approvals.