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Ford is selling Jaguar Land Rover to Tata Motors of India for $2.3 billion. The sale is expected to close by the end of the next quarter.

Ford and Tata said they do not anticipate significant changes to Jaguar Land Rover employees’ terms of employment. At closing, Ford will contribute around $600 million to the Jaguar Land Rover pension plans.

Ford wants to focus on its own brand’s international growth. It has invested billions in Jaguar Land Rover over the past 10 years but returns, particularly for Jaguar, have been poor.

Ford CEO Alan Mulally said: “We’re confident Jaguar and Land Rover have the products, plan and team to continue to thrive under Tata. It’s time for Ford to concentrate on integrating the Ford brand globally.”

Ford will continue to supply Jaguar Land Rover for differing periods with powertrains, stampings and other vehicle parts and technologies, such as environmental and platform technologies. Ford will also provide engineering support, including R&D, information technology, accounting and other services.

Ford of Europe chief Lewis Booth said: "This agreement provides Jaguar Land Rover with the assurances needed to maintain their focus on delivering the best results for the business."

The longer term aim is for the firms to develop their own stand-alone capabilities, however.

Tata Motors chairman Ratan Tata said: "We’ll endeavour to preserve and build on their heritage and competitiveness, keeping their identities intact. We aim to support their growth, while allowing the management to bring their expertise to bear on the growth of the business."

Tata Motors is India's largest automobile company, with revenues of $7.2 billion in 2006-07. It is the leader in commercial vehicles and the second largest in passenger vehicles.

The firm also has a joint venture with Fiat to manufacture passenger cars, engines and transmissions for the Indian and overseas markets. Tata Motors’ international footprint includes Tata Daewoo Commercial Vehicles in South Korea; Hispano Carrocera, a Spanish bus and coach manufacturer in which the company has a 21 per cent stake; a joint venture with Marcopolo, the Brazil-based body-builder of buses and coaches; and a joint venture with Thonburi Automotive Assembly Plant Company of Thailand to manufacture and market pickup trucks.

Jaguar Land Rover CEO Geoff Polites said: "We feel confident that the deal provides for the business needs of our brands and that we can forge a strong working relationship with our new parent company.”