Tata Motors [Get Quote] may get into a competitive auction process to get majority control in Jaguar and Land Rover, which have been put on the block by their owner, Ford Motor.

Sources said Ford was likely to shortlist two preferred bidders next month and go for a competitive auction to shorten an otherwise long-drawn bidding process.

In such a case, Tata Motors will be the second company from the Tata stable to participate in an auction for an overseas acquisition. Tata Steel [Get Quote], the steel company of the Tata group, acquired Anglo-Dutch steel company Corus by outbidding its rival suitor Brazilian firm CSN, in a high voltage auction.

Apart from Tata Motors, a handful of private equity players, including TPG, Cerberus, One Equity Partners and Ripplewood, are in the race for acquisition of the two luxury brands. They are in various processes of due diligence.

However, Ford so far has not disclosed the identity of the companies that have expressed interest in Jaguar and Land Rover by the stipulated date of July 19. It said it was impressed by the "strength and quality" of the interested parties. Sources said the valuation of the two brands - said to be $2-3 billion - might be affected by the uncertainty over how the European Union would apply new regulations on carbon-dioxide emissions. The new norms are scheduled to take effect in 2012. Ford needs money to fund its restructuring in North America.

Ford may retain a minority stake in the units of Jaguar and Land Rover to ensure security of engines and parts supplies. The company may also provide engineering support to the successful acquirer of these brands.

The bidders, particularly the private equity players, want Ford to keep the stake in the range of 30 to 50 per cent in the two units so that the supply of parts is guaranteed. Ford's production links with Land Rover and Jaguar border on the inseparable.

Ford retained a 15 per cent stake in Aston Martin when it was sold several months ago. It had bought Jaguar for $2.5 billion in 1989 and Land Rover for $2.73 billion in 2000.