Tata Motors, JP Morgan-backed One Equity Partners and rival Mahindra & Mahindra, along with buyout firm Apollo Partners, are on a shortlist for the luxury brands.

CEO Alan Mulally has said Ford could announce the sale of Jaguar and Land Rover by the year-end or early next year.

“Tata appears to have the edge because it is larger, because it has demonstrated seriousness of intent, and because there is a level of comfort with the unions,” an investment banker, who is not involved in the deal, said on condition of anonymity. Ford’s UK union leaders have backed Tata Motors’ bid on the grounds that the workforce’s interests would best be served by a partner “with an established presence and background in manufacturing.”

“They already have a presence in the UK through their steel, software and tea companies,” the banker said, referring to Tata Steel’s Corus, Tata Consultancy Services and Tata Tea’s Tetley units. “They understand the UK market, and the UK market understands Tata.”

Credit situation
A senior Tata Group official declined comment on the deal on Wednesday, but made a general observation that in the current credit situation, Tata may have an edge over private equity firms in competing for assets.

“The impact (of subprime crisis) on us will perhaps be less than on other people because we’re a strategic industrial buyer with strong balance sheet,” Tata Sons Executive Director Alan Rosling told Reuters.

“There may well be some opportunities for us in this,” said Mr Rosling, who spearheads the group’s international drive.