According to Business Week, Ford (NYSE: F) brands Jaguar and Land Rover have captured the interest of Indian private conglomerate Tata Group, owners of Tata Motors (NYSE: TTM). India's largest car manufacturer is reported considering a bid for the legendary British brands, hoping to market them internationally and reduce its dependence on domestic sales. The well-heeled Tata Group includes Tata Steel, the world's fifth largest steel company, which recently concluded a $12 billion takeover of Britian's Corus Steel.


Tata Group owns 96 companies, employs over two million people and has a market cap of over $50 billion. Tata Motors has been building cars since 1945, with revenues of $5.5 billion in 2006. In 2004, it acquired Daewoo Commercial Vehicle Company, and owns a stake in Spanish bus manufacturer Hispano Carrocera. The company has stated its intent to bring to market a $2,500 car to emerging markets by next year.

Buying Jaguar and Land Rover would do more for Tata than give it international access; it could lend the company the credibility to gain immediate acceptance in the burgeoning vehicle market worldwide.

Ford Motor Company (NYSE: F) is currently taking bids on parts of its Premier Automotive Group, which includes Jaguar, Land Rover and Volvo. (Another Premier brand, Aston Martin, was sold to investors in March for roughly $900 million.) There has been speculation that the Indian automaker Tata Motors (NYSE: TTM) may be interested in the two British luxury brands, but so far Ford has denied that it is selling Volvo. Ford's denials have been fairly weak, however, and it stands to reason that given Ford's rather desperate need for cash, it would sell the Swedish car maker -- the only profitable part of the Premier Automotive Group -- if the price were right.

It's pretty clear that Ford is in trouble, having mortgaged its plants and property -- and even its hallowed name -- to raise cash to support current operations. As Kevin Shult wrote last week, Ford is a symbol of the hard times facing American automakers, which are stuck offering large, heavy, inefficient vehicles to consumers who now want something better. There's plenty of blame to go around for the problems in Detroit. While many analysts focus on labor costs, especially retiree health care, I would argue that poor management, weak investment, and mediocre design and engineering are at least as important. And that's where Volvo can play an important role in helping Ford recover.

Tata Motors Ltd. (NYSE:TTM), the Indian motor vehicle giant, is bringing to market a new car that could find a warm fuzzy home in the hearts of green drivers. The Air Car uses compressed air to drive its pistons. Refills are as simple as a stop at the compressor station, and cost a reported $2 for 340 liters of air at a pressure of 4,350 psi. The car also has a built-in compressor to recharge its tank from any electrical outlet in four hours.

Tata claims the car can reach speeds of 68 mph and travel up to 125 miles between charges. It was designed by MDI of Luxembourg, who hopes to license the design worldwide.

Tata's CityCAT model is expected to list for $12,700. The company hopes to have 6,000 cars on the streets by next year. Unfortunately, the design is too fragile to meet U.S. requirements, so don't expect to see one soon.