Geely Automotive, the Chinese carmaker whose parent is eyeing Ford's Volvo unit, is set to raise capital through a bond issue in a move that may provide funding for a Volvo bid.

Analysts, however, said the bonds could also be used for Geely to expand its car making capacity rather than to launch an immediate bid for Ford's $2 billion plus Swedish car unit.

Geely said last week its parent was considering a bid for Volvo with a local government-backed investment firm.