An Indian carmaker has moved to the forefront of negotiations to buy two of the world's most prestigious car brands from Ford Motor Co.
Yesterday, Ford named Mumbai-based Tata Motors the preferred bidder for Jaguar and Land Rover. Tata beat out a rival Indian carmaker and an American private equity company, and sale talks are now expected to enter their final phase.
"While no final decision has been made, we will proceed with further substantive discussions with Tata Motors over the forthcoming weeks," said Lewis Booth, Ford executive vice president.
Ford acquired Jaguar in 1989 and Land Rover in 2000, for a combined $5.2 billion. The Detroit automaker had purchased them to complement its parallel acquisitions of Aston Martin and Volvo, which all became part of its Premier Automotive Group.
Ford does not break out financial results for its individual brands, but industry analysts say the combination has never generated the success Ford anticipated. It sold Aston Martin in May for $921 million to a consortium of British investors and later announced plans to unload Jaguar and Land Rover.
Ford has said it intends to hang onto Volvo, investing money into making it more upscale.
For Tata, which only built its first car a decade ago, the acquisition would be a significant step forward. Known for its low-priced cars aimed at Indian buyers, Tata's control of the two British marques would immediately make it a player in the luxury market, and also provide it access to far more modern technologies, as well as new markets.
Tata recently garnered attention for its plans to release a sub-$3,000 economy car. What synergies exist between the world's least-expensive econobox and $75,000-plus sports cars and luxury sports cars that top $100,000 remains to be seen.
Among the other bidders for Jaguar and Land Rover were Indian carmaker Mahindra & Mahindra as well as private equity company One Equity Partners, a New York private equity company that makes investments for JP Morgan Chase.