- The Washington Times - Friday, January 4, 2008

DETROIT (AP) — An Indian car maker that will unveil the world’s cheapest car next week may soon produce two of the world’s premier brands as well.

Ford Motor Co. named Tata Motors Ltd. the top bidder for its Jaguar and Land Rover brands yesterday and entered into “focused negotiations at a more detailed level,” meaning Tata was named preferred bidder for the storied British automakers.

“While no final decision has been made, we will proceed with further substantive discussions with Tata Motors over the forthcoming weeks,” said Lewis Booth, executive vice president of Ford’s European units.

Jaguar and Land Rover employees in the United Kingdom were told about the negotiations yesterday morning shortly before the company made the announcement.

Meanwhile, automaker Audi said yesterday that it had started production of its midsize A6 luxury sedan in India, with a target of producing more than 2,000 cars a year by 2015 at a plant there.

A spokesman for the German automaker said Audi will invest $44 million in the Aurangabad plant in Maharashtra state.

Ford executives have said they expect to sell the two British automakers early this year.

Ford spokesman Jay Ward in London would not say how much Tata bid for the automakers, nor would he say if two other bidders, Indian automaker Mahindra & Mahindra Ltd. and U.S. private equity firm One Equity Partners LLC, still were in the running. Last month people close to the negotiations with Ford told the AP that potential suitors had submitted bids for both companies that ranged from $1.5 billion to $2 billion.

Mumbai-based Tata Motors confirmed the negotiations yesterday.

“We are now entering a period of more focused and detailed negotiations with Ford. We hope both parties can reach an agreement in the forthcoming weeks, though these are complex discussions and there is still much work that needs to be done before that position is reached,” a company statement said. “We are pleased by the progress in the discussions to date and very positive about the prospects of this business going forward.”

Tata plans to unveil its ultracheap $2,500 car next week at an auto show in New Delhi.

Company Chairman Ratan Tata said in a recent interview that acquiring Jaguar and Land Rover would help bring global visibility to his group — a sprawling conglomerate that makes everything from automobiles to steel and software, and a name that until recently was little-known outside India.

Ford is interested in maintaining its parts-supply relationship with the new owners of Jaguar and Land Rover. The company builds engines for Jaguar in Europe.

Industry analysts have said Ford wants to find a buyer who would preserve the Jaguar and Land Rover heritage and jobs in the U.K.

Ford, which is the top auto seller in the U.K., doesn’t want to rankle British customers, they said.

Cash-hungry Ford, which lost $12.6 billion in 2006 but earned $88 million in the first nine months of 2007, has been looking to sell Jaguar and Land Rover.

Ford has said it plans to keep Volvo for now, fixing its cost structure and making it a more premium brand.

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