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Jaguar said to be taken over by Indian automaker

Indian takeover of Jaguar and Land Rover would be a boost to local pride and a sign of India 's economic rise.

But many investors and automotive industry analysts question whether a bid by India's Tata Motors - maker of workhorse trucks and low-end mass market cars - for the two luxury brands would make much business sense.

Chairman Ratan Tata confirmed last month that he is clearly interested in entering the competition for the iconic Britain-based automakers, which have been put on the auction block by financially troubled Ford Motor Co. Several U.S. private equity firms are also expected to submit bids.

The graying, distinguished Tata has said such an acquisition would help bring global visibility to his group - a sprawling conglomerate that makes everything from automobiles to steel and software, and a name that until recently was little-known outside India.

Tata Steel made a splash in January when it won a bidding war to buy Anglo-Dutch steel maker Corus Group PLC for US$12.1 billion. That deal, India's biggest foreign acquisition, highlights the country's recent outward expansion into the global economy.

But while the Corus acquisition was widely seen as a good match - and since appears to be paying off - experts don't see similar synergies in a Tata Motors takeover of Jaguar and Land Rover.

Long a giant in truck and bus manufacturing, Tata has only about a decade of experience selling cars - and most recently, has grabbed headlines with its plan to make an ultracheap car costing just 100,000 rupees (US$2,400, EUR 1,750) The company has been successful selling into the burgeoning Indian market, which is dominated by hatchbacks and subcompacts.

Jaguar and Land Rover are luxury brands that cater to a small percentage of customers and have a limited distribution network. What Tata needs more, if it wants to reduce its dependence on Indian buyers, is a large overseas sales network that targets the mass market, experts say.

"It makes no sense at all," said S. Ramnath, an auto analyst at Mumbai-based brokerage firm SSK Securities Ltd. "It's passion that is behind this move."

Morgan Stanley analyst Balaji Jayaraman called such an acquisition "value-destructive given the lack of synergies and the high-cost operations involved," in a note to clients.

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