Tata may be preferred bidder for Ford brands

Ford Motor Co. may choose India’s Tata Motors as the preferred bidder for its Britain-based Jaguar and Land Rover brands, a person familiar with the deliberations said Monday.

The selection would allow Ford to negotiate exclusively with Tata before reaching a final agreement. Mahindra & Mahindra, another Indian manufacturer, and JPMorgan Chase & Co.’s One Equity Partners buyout unit have also been candidates, people familiar with the bidding said in September.

Dearborn, Mich.-based Ford wants to sell the units to focus on its money-losing North American operations. Ford spokesman John Gardiner said that no decisions had been made and that the automaker expected to announce a deal early next year.

Ford lost a record $12.6 billion in 2006 and is unwinding a 20-year initiative to boost profit by adding European luxury vehicles. The company failed to reach its goal of generating a third of earnings from the European brands by 2006.

The Times of London reported Sunday that Mumbai-based Tata was likely to be selected as the preferred bidder.

The British trade union for Jaguar and Land Rover last month endorsed Tata’s bid although it said it preferred that the units stay within Ford.

Ford began its foray into European luxury brands by buying a controlling stake in Britain’s Aston Martin, which makes cars that cost $100,000 or more. The company put Aston Martin on the block last year and sold it in May for $931 million to investors led by auto-racing champion David Richards.

Ford failed to make Jaguar profitable and invested $2.1 billion in the brand in 2005, almost as much as the $2.5 billion it paid in 1989. Land Rover was losing money when Ford bought it from BMW of Germany for $2.73 billion in 2000. The U.S. company has made Land Rover profitable.