SHANGHAI: The parent company of Geely Automobile Holdings Ltd said yesterday it plans to buy 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 East China that also makes premium multi-purpose vehicles.

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