According to sources, Tata Motors may have inched closer to bagging the deal for Land Rover and Jaguar, which are part of Ford''s loss making Premier Automotive Group, reports CNBC-TV18. Sources said that M&M is likely to bid for Jaguar and Land Rover along with PE player Apollo.

The two Ford brands, Land Rover and Jaguar, are on the block and have attracted half a dozen suitors ranging from private equity firms such as Cerebrus and Blackstone to Indian auto companies like Tata Motors and Mahindra & Mahindra.

Earlier reports had suggested a likely deal size of about $1.5 billion. Tata Motors has refused to comment on the deal. Ford, too, has denied any development regarding about its proposed divestment of Jaguar and Land Rover. It has said that it is still evaluating expressions of interests.

All that the American auto major said was, "We are pleased with the positive expressions of interest we have received and in the strength and quality of the interested parties. We are exploring, in greater detail, the potential sale of the combined Jaguar-Land Rover business with selected parties, who have expressed interest. No final decisions have been made at this time."

The move from Tata Motors, analysts estimate, is aimed at asserting Tata Motors'' presence in Europe. In all likelihood, these two brands have been picked up together because Ford was very clear according to analysts - Land Rover is faring much better than Jaguar which is struggling and is a loss making unit. It will be difficult for Ford to sell Jaguar independently at a price at which it expects.

Of course, it will find a buyer but may not find the price it expects because Jaguar is a loss making unit and its volumes are falling; it is struggling to maintain its foothold in the market. So both clubbed together, is what the winning bidder would get.

If Tata Motors manages to pull off this deal, it will take the company to a different league altogether in the global automotive market because these two brands though struggling financially, are very prestigious brands.

Land Rover is the second oldest brand after Jeep, in terms of SUV brands. Jaguar in itself is very niche. Jaguar stands for power and speed, and Land Rover stands for pure strength.

Land Rover, compared to the Jaguar, is performing better in the market in the first six months of this year. Land Rover''s global sales were the best ever in terms of the first-half in its nearly 60-year old history. Jaguar, though, is facing some tough times.

But that is something the winning bidder would have done some homework about; in terms of how to revive that brand as well. There will be lot of rub-off effects that will be felt in the entire organisation.

Jaguar''s strength lies in suspension and chassis development. Jaguar till two - three years back was also present in the Formula-One events. Land Rover brings in absolutely top-end technology in terms of off-road vehicles. That is something that Tatas are working to enhance their R&D capabilities. Last year, they acquired a design and engineering services in UK and the acquisition of these two brands will enhance the company''s R&D capabilities, which will reflect in its new products. Ratan Tata had said that the next two years would be the most active years in the Tata Motors'' history in terms of product development and enhancement of R&D capabilities.

Tata Motors was present in the UK, till recently and these two brands are very strong British brands. So, it will definitely give Tatas another opportunity to enhance its presence in that market.

It is unlikely that the vehicles would be manufactured in India.

These are very niche brands and some components are handcrafted. That''s the beauty of the brand like Jaguar. But what we can expect is some shift of production components like aluminium components. Most of the global manufacturers are sourcing that from India. That would be something, which can happen in the near future, sourcing out some components made by Indian component vendors and sending it back to the plants in UK and hence reduce their production cost.

The actual funding model is difficult to say at this point. But the company might look at raising money in the international market for various activities, which may include some inorganic growth activities. But there will be some liabilities that would come, if not from Land Rover, at least from Jaguar.