Tata in driving seat for top brands

Workers at Jaguar and Land Rover started returning to work today still waiting to hear who is favourite to buy the two famous marques from American owner Ford.

Indian industrial giant Tata, which bought the steel firm Corus early last year, is believed to be the front-runner to take over the two luxury brands for around £1 billion. Tata had been expected to be named as the preferred bidder before Christmas, but Ford delayed an announcement because it wanted to tell workers itself – and to iron out final details.

The Indian group is believed to have edged out the two other bidders, rival Indian manufacturer Mahindra and Mahindra and US private equity group One Equity Partners.

Ford put the two car brands up for sale last year as part of a shake-up to shore up flagging profits after posting its biggest loss in its 103-year history.

Steel and tea-maker Tata is said to be keen to keep all three of Jaguar and Land Rover's UK plants at Solihull and Castle Bromwich in the West Midlands and Halewood, where it employs a total of 13,500 people.

The acquisition would give Tata Motors the technology to build better cars and a sales network to boost its international profile.

As it looks to be in pole position to drive off with Jaguar and Land Rover, Tata has just announced plans to launch the world's cheapest car this month.

Ratan Tata, head of the Tata conglomerate, is due to unveil the "People's Car" on January 10 at a New Delhi auto show which will carry a price tag of 100,000 rupees – or just over £1,250. The cheap car is aimed at getting India's masses off their motorbikes and into cars.

"I hope to make a contribution to making life safer for them (the masses), said reclusive tycoon Ratan Tata.

"That's what drove me – a man on a two-wheeler with a child standing in front, his wife sitting behind, add to that the wet roads – a family in potential danger," he said.