Tata leads in race for car giants

Tata, the Indian business empire, has moved into pole position in the £1.5billion race to buy Jaguar and Land Rover, two of Britain’s most famous car marques.

Sources close to talks say that positive meetings between Tata Motors’ managing director Ravi Kant and trade union and government officials have given the Indian conglomerate the edge over rival bidders. But Tata still faces stiff competition.

Tata, which earlier this year bought steel giant Corus, is competing with One Equity, the American private equity group, and Mahindra, the Indian car group that is linked with Apollo, another American buyout firm.

It is believed that Ford, the American automotive giant that is selling Jaguar and Land Rover as one business, could decide on a preferred bidder within weeks.

The Tata Motors bid has won the backing of UK union leaders, who although preferring to remain part of Ford feel that if an agreement is reached, the workforce’s best interests “would be served by finding a partner with an established presence and background in manufacturing”.

Union backing could be seen as crucial to what would be a politically sensitive deal, as Ford would remain a major employer in the UK even after it sells the two luxury brands, in which it is likely to keep a stake.

Tata has said it is committed to the two brands as a long-term investment and endorsed the current management. 

Tony Woodley, general secretary of Unite, said: “Based on serving the best interests of the union members at Jaguar-Land Rover, the stewards agreed that Tata best fits these criteria.” While Jaguar is losing money – it could lose around £250m this year – Land Rover is going through a purple patch, selling vehicles all over the world, being particularly strong in Russia and China.