Tata, Hyundai Bid for Jaguar?

Ford, which is struggling financially after losing $12.7 billion last year, moved closer to selling its Jaguar and Land Rover brands last week as it confirmed a number of "third parties" had submitted bids to purchase or take stakes in the British brands.



Ford did not identify any of the bidders. And adding a note of ambiguity to the proceedings, company officials talked about a "soft deadline" that could allow even more bidders.

Ford declined to say how many bids have been received or who submitted them. However, several private equity firms, among the Cerberus, Ripplewood Holdings and One Equity Partners, are thought to be in the hunt for Land Rover and Jaguar, according to reports originating inLondon.

However, higher interest rates and the relatively small amount of cash generated by both Land Rover and Jaguar could make the deals problematic for Ford. Until recently, automotive assets have been considered cheap in the private equity world. That could be changing as banks put higher demands on loans required to complete certain deals.

More intriguing were reports that India 's Tata Motors Ltd. and Mahindra & Mahindra Ltd., as well as Korea 's Hyundai, submitted bids. Given the Hyundai's insular corporate culture, it's unlikely it will press hard - and ultimately, the company's financial personnel may have been more curious about Jaguar and Land Rovers finances.



The two Indian companies are a different story. Both rich and eagerly looking for ways to expand their presence in the automotive space, they may hold a small edge in the competition for Jaguar and Land Rover.

Tata recently completed a deal with Fiat, and Mahindra is already planning to build utility vehicles in the U.S. While outsourcing of technical support functions from North America and Western Europe has helped drive the Indian economy in recent years, Indian companies and conglomerates such as Tata and Mahindra also have been quick to utilize assets and to draw on expertise in other parts of the world to expand.

A deal with an Indian partner also could help Ford expand in the south Asian market, which Ford officials have said is one of the areas they have targeted for future growth. However, Ford's problems in North America have hurt its ability to raise the capital necessary to move into the Indian market.



In March, Ford sold a majority stake in its Aston Martin luxury sports car unit for $848 million.

Meanwhile, Ford's Volvo unit also was put up for strategic review, which is aimed at maximizing the value of the company's assets. The review could lead to a potential sale of Volvo, though some analysts think it unlikely because the Swedish carmaker is now critical to the company's product development. Ford hasn't received any bids for Volvo either.

Only last year, Ford mortgaged its factories to get a $23.4 billion loan package to cover the cost of its ongoing restructuring and to keep it afloat until it makes a profit again, which is now projected to be in 2009.