Aston Martin and the bid war: Who will drive Bond's car?

Aston Martin stands at the centre of an international takeover battle after Mahindra and Mahindra trumped an Italian bid for half of the British luxury car maker.

Italian private equity fund Investindustrial reached an agreement with the owner, Kuwaiti investment house Investment Dar, but Mahindra and Mahindra made a higher offer, leaving the fate of the 98-year-old icon of British motor engineering hanging in the balance.

Aston Martin makes the cars immortalised by James Bond films down the decades in Gaydon, Warwickshire, the heartland of England's early 20th century motor manufacturing heyday.

The company was sold in 2007 by US-based Ford Motor Co. for 479 million pounds to Kuwait's Investment Dar and another Kuwait fund, Adeem Investment Co.

The consortium was fronted by David Richards, former Formula 1 Benetton and BAR racing boss, who remains chairman.

Aston Martin sells approaching 15 per cent of its DB9, Vanquish and other models in Asia. Wealthy Chinese buyers snapped up 110 cars in 2010 and sales are expected to have multiplied fivefold to over 500 this year.

"Talks are continuing," said one source, who said Investindustrial had bid between 200 million and 250 million pounds for the stake, and is confident of winning the race because it sees its proposal as "technically" superior, including a technical partnership deal with Daimler AG's Mercedes. The same source said manufacturing would stay at Gaydon under the Italian proposal.

Investindustrial, owned by Italy's Bonomi family, is not new to luxury motor brands. In 2006, it bought Italian motorcycle maker Ducati and sold it for about €860 million last April to Volkswagen's Audi division.

Mahindra is the world's No. 1 tractor maker. It also makes more sport utility vehicles than any other Indian motor manufacturer, and controls South Korean car maker Ssangyong Motor Co Ltd. A second source familiar with the process said Mahindra was keen to access the Aston Martin technology to upgrade its existing vehicle platform.

Another Indian motor company, Tata Motor, owns British luxury manufacturer Jaguar Land Rover, and has had even more success than Aston Martin in China, now Jaguar Land Rover's biggest market.