Ford said it had opened detailed negotiations with potential buyers of its Jaguar and Land Rover brands as it reported its first quarterly profit for almost two years.
The US carmaker said yesterday it had received a number of expressions of interest and was "delighted" by the "strength and quality" of those involved.
Ford refused to say how many responses it had received or where they had come from. However, Tata, the Indian company that bought the steelmaker Corus this year, and Mahindra & Mahindra, India's biggest utility vehicle maker, are said to be among those interested.
Cerberus, which is in the process of buying Chrysler, has also been tipped as a possible buyer, as have US private equity firms One Capital, TPG and Ripplewood.
Land Rover and Jaguar are part of Ford's Premier Automotive Group. Ford has already sold one PAG brand, Aston Martin, and another, Volvo, is the subject of a separate strategic review.
Ford has given no indication of how much it would want if it were to sell the two UK brands but Merrill Lynch analysts estimate they could be worth between $1.3bn and $1.5bn (£650m-£750m).
Yesterday Ford said PAG had made a second-quarter pre-tax profit of $140m, against a loss of $162m in the same period last year, with all brands showing improvement. Land Rover is enjoying record sales, despite the impact of the weaker dollar, and Jaguar is believed to have reduced its losses. Though industry sources have said Land Rover is likely to be a more attractive option than Jaguar, splitting the two is not seen as a feasible option.
"We are now exploring in greater detail the potential sale of the combined Jaguar-Land Rover business with selected parties who have expressed interest," Ford said.
"The objective of any sale would be to enable Ford to concentrate on its core business strategy, while ensuring Jaguar-Land Rover has the ownership, technology and investment structure it needs to allow it to reach its full potential."
The two brands employ about 16,000 people at Castle Bromwich, Solihull and Halewood. Jaguars and Land Rovers are made on the same production line at Halewood, which is one reason a separate sale is not being considered.
Asked about the future of the two UK marques, Ford's president and chief executive, Alan Mulally, said: "These are two great brands and we have invested in these brands. They are making good products and there are even more good products to come on line. I see a very bright and very exciting future for Jaguar and Land Rover."
Mr Mulally said there was no particular timescale that Ford was working to in selling the two businesses.
Union officials met Ford yesterday to discuss the position at Land Rover and Jaguar and are to meet the company management again next week.
These developments came as Ford surprised Wall Street by posting a second-quarter profit of $750m while revenues rose 6% to $44bn. The company said its performance had been boosted by a reduction in costs and favourable pricing, though the impact of those factors had been partly offset by currency movements.
Explainer: The drive behind India's carmakers
Why Indian carmakers are preparing to open up their chequebooks for the distinctive marques of Jaguar and Land Rover may be difficult to fathom. India is known for knocking out small, cheap cars and hi-tech auto components.
But cars, buses and bikes are quiet success stories in India. The country's export of automobiles has grown faster than software over the past four years. Though they amount to only a few billion dollars today, in a decade these exports will be worth more than $35bn (£17.5bn).
At this level of sales, Indian companies do not want just to make cheap two-wheelers and hatchbacks. Tata Motors and Mahindra & Mahindra have global ambitions, with a focus on exports.
The rapidly growing domestic market for cars and the new rich also provide the base for production of all manner of marques. Four-wheel drive vehicles are very popular in urban India - and Land Rover is an obvious brand to market in the country.
The two Indian carmakers are nothing if not ambitious. Tata, the third-largest carmaker in India, says it will launch a small car priced at under $2,500 next year - a move that saw Ford and Toyota re-examine their cheap car strategies. Mahindra has an alliance with Renault and Nissan to make 400,000 saloons in India.
Jaguar and Land Rover would allow Indian firms access to new markets, distribution networks and technology. The question is whether their pockets are deep enough to run them profitably.
Randeep Ramesh
