Ford Expects A Sale Soon…

FoMoCo is poised to name India's Tata Motors as preferred bidder for its Jaguar and Land Rover brands, Britain's Sunday Times newspaper reported. An announcement could come in the next fortnight, with Tata expected to pay about 1 billion pounds ($2 billion), it added.

Ford, which is spinning off the British companies to concentrate on restructuring its loss-making North American operations, said last week it aimed to complete the sale in early 2008. Tata is competing in the auction for the luxury brands with rival Indian group Mahindra & Mahindra and private equity firm One Equity Partners, according to Reuters.

The Detroit-based automaker needs to be efficient as a performance chip to alleviate its standing in the auto realm. The company expects to complete the sale of its Jaguar and Land Rover nameplates by early next year at the latest, company executives said.

Ford spokesman Mark Truby said Friday that the automaker cannot rule out the possibility of a deal for a buyer for the brands before the end of the year. However, Ford's President of the Americas Mark Fields said it was possible the company might not be ready to announce a deal until the early part of next year. "Basically we want to make sure the buyer can uphold the tradition of these brands," Fields added.

The guessing in Detroit is that Tata Motors, the auto branch of the diversified Indian manufacturer, and Chase & Company's One Equity Partners are the leading contenders for ford's Jaguar and Land Rover brands.

The senior adviser at One Equity Partners is former Ford CEO Jacques Nasser, who spent 3.3 billion dollars to acquire Land Rover from BMW. Ford acquired Jaguar from the British government in 1990.

Joseph Barker, an analyst with CSM Worldwide Inc., said Ford could wind up selling the brands to private-equity investors. "Private equity could play a big role," he said. "However, they might sell the brands to a company like Tata for strategic reasons. Any deal with Tata is likely to include a strategic alliance between Ford and the Indian automaker. Tata also has a lot of money.”

A report said Tata was to bid in the range of 1.5-2.2 billion dollars. Analysts had earlier pegged the value of the two brands at around 1.5 billion dollars.

Unions representing workers at Jaguar and Land Rover in Britain have endorsed an alliance with Tata, said AFP. Fields, however, turned aside reporters' questions about which bidder was favored. A deal with Tata could give Ford important access to the promising Indian auto market, Barker noted.

Access to emerging markets sparked Renault-Nissan's successful bid earlier this month for a 25% stake in the struggling Russian automaker AutoVaz. Vehicle sales in Russia are expected to double by 2015, the report continued.

President of the Center for Automotive Research David Cole said that larger automakers need alliances both to bolster their positions in emerging markets and to spread the costs of developing new vehicles.