Volvo’s Chinese owner offered to take a large minority stake in the Japanese maker of Subaru cars, an offer never accepted that illustrates its ambition to expand business in China and around the world and gain more technology to improve its own cars.

Two sources with direct knowledge of the matter said Zhejiang Geely Holding Group offered to buy a stake of about 20 per cent in Japan’s Fuji Heavy Industries late last year through an investment banking intermediary. If the bid had been successful, it could have paved the way for a joint-venture company in China to produce Subaru’s which currently have to be brought in.

China has been the world’s biggest auto market by volume since 2009. By taking over Volvo and now possibly another foreign brand, Geely wants not only to expand its business around the world quickly but use their technology and auto design and manufacturing expertise to improve its own cars.

“Geely’s interest in Fuji Heavy sounds like a good strategy,” said Yale Zhang, head of Shanghai-based consulting firm Automotive Foresight. Volvo is a premium brand and Geely’s own brands in China are all affordable low end brands. “Fuji Heavy could have filled the gap in the middle of product offerings Geely has,” Zhang said.