Tata, the Indian company trying to bring the world’s cheapest car to the South Asian country, is expected to be named as the preferred bidder for Ford’s Land Rover and Jaguar brands in the next few days.

A source said that although nothing could be confirmed, an announcement is expected in the next few days.

Tata is the front-runner in a race that includes Mahindra & Mahindra, a fellow Indian car group, and One Equity, the American buyout group.

In India, Tata’s carmaking division is seen as a brand for the people, and the company is famous across the sub-continent as the manufacturer of trucks and buses with the slogan “OK Tata” emblazoned on the back of the majority of trucks.

Tata is set to roll out a 100,000 rupee (£1,200) “People’s Car” next year.

Ratan Tata, the chairman, has said that he wants the cut-price vehicle to help poorer Indians to upgrade from motorcycles, which currently transport entire families, to cars.

If Ford chooses Tata, it will be an historic moment for the car industry, marking the first time that a major Western car group has been bought by an Indian company.

The US carmaker is expecting to make up to £1 billion from the sale, although it is expected to keep some form of equity interest in the devolved business.

Trade unions have thrown their weight behind Tata.

Officials from the factories serving the iconic brands believe that the family-controlled Indian manufacturer would offer more long-term security than One Equity, the other leading bidder.

Tata, a conglomerate whose interests range from salt mining to software engineering, has been gradually expanding in the UK, where it owns the Tetley tea brand, and it is now the world’s fifth-largest steelmaker after buying Corus.

Jaguar and Land Rover together employ 15,000 in Britain. It is understood that Tata plans to retain all three of the UK factories, at Solihull and Castle Bromwich in the Midlands and Halewood on Merseyside.

However, union leaders have privately voiced some concern about Tata over market positioning, fearing that the luxury marques will not sit well in the group.

They are also concerned about the company’s potential to source components or manufacturing from overseas, costing British jobs.

Tata will have to negotiate a settlement with pension trustees and a side deal with Ford over continued supply of engines and other components.

Ford has involved the Government and unions in discussions on the sale because of the large number of jobs that the two brands support.

The number that the two brands employ expands to 40,000 if employment throughout the supply and support chains is taken into account.

Ford sold Aston Martin earlier this year. The company is struggling to return to profitability after record $12.7 billion (£6.3 billion) losses last year.

Tata’s image as a mass-market supplier took a knock at the beginning of the year during protracted negotiations over land for its small car plant in West Bengal, which ended in violence.

Several poor farmers were killed by state police as they protested against their land being taken by the government, triggering state-wide strikes and weeks of unrest.

The incident sparked outrage in what came to be seen as a battle between India’s super industrial-ists and its impoverished farmers.

Global phenomenon

— Tata Group is made up of 98 operating companies in business sectors including steel, salt, software, tea, energy, cars and trucks, hotels and chemicals

— The group’s 27 publicly listed enterprises have a combined market capitalisation of $73.6 billion (£36.5 million) as of December 13, 2007

— Tata had revenues in 2006-07 of $28.8 billion (£14.3 million), the equivalent of about 3.2 per cent of India’s GDP

— Tata has operations in more than 85 countries across six continents, and its companies export products and services to 80 countries

— Tata companies together employ 289,500 people

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