Indica - not yet a money-spinner

The Indica was launched in December 1998, but has been consistently losing money ever since.

A spokesman for Tata said he envisioned exporting 12,000 Indicas to the UK each year, with initial shipments beginning by the middle of next year.

But MG Rover - which has also been losing money recently - stressed that no deal had yet been struck.

The Indica is the first passenger car developed completely in India and is Tata's only car model.

Break-even ambitions

According to the Indica website, the car was launched because there was no other model that "perfectly understood Indian conditions and the Indian customer".

Will Indica be sold under the Rover brand?

It won 100,000 customers in the first two years since its launch, and is hoping to break even in the next financial year which begins in April.

The Times of India newspaper increased speculation over the potential tie-up with MG Rover by saying that Indica could be sold under the Rover brand name.

It quoted "sources close to the negotiations" as saying the Indica was "of specific interest to MG Rover because they have no small car at present and this tie-up could supplement its product line".

Under-powered?

The newspaper also reported that the cars would be fitted with more powerful Rover engines because the Indica's current engine capacity - of 1,400cc, with petrol and diesel versions - might prove under-powered for British customers.

A Tata Engineering & Locomotive Company (Telco) spokesman declined to comment on these two points.

Telco shares rose almost 3% to 143.7 rupees.

Tata is India's biggest conglomerate and is made up of 80 diversified companies making products from tea to watches to air conditioning.