Mahindra & Mahindra is reported to be one of the three suitors for the UK, Birmingham-based struggling van maker LDV owned by Russian billionaire Oleg Deripaska's GAZ Group.
The Times has reported that UK government contacted M&M, the market leader in multi-utility vehicles in India, and another company based in the Far East were the during the weekend to find out ''their commitment to LDV.''
The third interested party is a former executive of a top line American car manufacturer, who is looking for partners to bid for LDV, but his bid is still at a nascent stage.
Government officials were making hectic efforts over the weekend to save the van maker from collapse after the UK government refused to provide it with an additional £20 million-£30 million bridging loan beyond the out £24 million already doled out to LDV at the time GAZ acquired it in 2006.
LDV was acquired by Russia's second largest car manufacturer, Gaz from an affiliate of Sun European Partners in 2006 but due to declining vehicle sales in the UK and overseas, Gaz said that it could no longer support LDV financially as Gaz had lso been suffering ftrom low vehicle sales in Russia and was restructuring part of its debt.
The City Council of Birmingham, where the LDV plant is located, said that it was not in a position to bail-out the van maker but was worried about the 850 workers and 5,200 dealers and suppliers, who depended on LDV for their survival.
Last week, LDV offered vans as part-payment in lieu of the money owed to dealers and some suppliers, to whom it is reported to owe tens of millions of pounds.
The van maker, which stopped production in December due to a drastic slump in sales, also has to pay about £1 million as part of its employees insurance contribution.
In a show of support for the company employees of LDV came forward to help the company with hundreds of workers offering to take a 10-per cent pay cut and a three-day week till such time the management was able to negotiate a buyout.
In a desperate move to save itself from an imminent collapse, LDV's management has been pleading with the UK government to give it a £5-million bridging loan till it is able to get funds from the European Investment Bank as well as complete a buyout deal with interested buyers for which the due diligence could take time.
Originally formed in 1993 as Leyland DAF Vans Ltd, it later changed its name to LDV Group and it is a specialist manufacturer of the multi-award-winning range of Maxus light commercial vehicles with plans to bring out electric car in the near future.
The global economic downturn has hit the UK automobile industry the hardest as official figures for the month of February showed that new cars built in Britain plummeted by almost 60 per cent, where only 59,777 cars rolled off production lines.
In 2004, the UK government's lopsided policy of integrating its defense effort with the EU, a defense contract to re-equip the army with 8,000 new trucks, then worth £1.6 billion, went to a German-owned firm, Man-Nutzfarzheuge instead of LDV.
This was in spite of LDV's vehicles being battle-proven and meeting all the requirements of the defense ministry, to manufacture trucks at the LDV plant at Birmingham and create hundreds of new jobs.
Indian auto major, M&M said last week that it was interested in building the Renault hatchback Sandero in India. The company already has the entry level Logan in India but plans to launch more hatchbacks and sedans in the country.
This month it invested around $3 million (30 million South African rand) to increase stake in its South African joint venture, Mahindra South Africa, a subsidiary that imports fully built vehicles from India, from 51 per cent to 91 per cent. (See: M&M hikes stake in South African joint venture to 91 per cent)
M&M is also talking with Malaysian auto manufacturer Proton to launch its small car in India where it may use its Nashik plant to manufacture the car in both the petrol and diesel version and will probably launch it by 2010.