Mahindra drops out of Jaguar, Land Rover bid

Indian automaker Mahindra will not bid for luxury British car brands Jaguar and Land Rover, although India's Tata Motors is still “strongly committed” to a deal, a report said Friday.

The Economic Times newspaper said the Mahindra Group feared the onset of new tighter European Union emission regulations due in 2012, noting that neither of the two brands had smaller fuel-efficient models in their product lines.

The paper also said Mahindra was also concerned about continued dependence on Ford for key vehicle components.

India's Tata Motors, however, “remains strongly committed to the deal and is expected to be among the three major contenders” in the bidding.

Neither company could be immediately contacted for comment.

The paper identified the other two interested parties as US buyout funds TPG and Ripplewood.

Ford announced in June that it was considering selling off the two labels as it restructures its North American operations in a deal that media reports say is worth around 1.3 billion to 1.5 billion dollars.

Ford bought Jaguar in 1989 for 2.5 billion dollars and Land Rover from Germany's BMW in 2000 for 2.7 billion dollars.

Tata's continued interest would be in keeping with the Tata conglomerate's growing appetite for overseas acquisitions. Earlier this year, Tata Steel bought Anglo-Dutch steelmaker Corus for 13.7 billion dollars, India's biggest-ever foreign takeover.