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Last Updated: Thursday, 26 July 2007, 11:48 GMT 12:48 UK
Ford posts surprise $750m profit
The Land Rover plant in Solihull

US carmaker Ford has posted its first quarterly profit since 2005, crediting cost-cutting and the sale of its Aston Martin business for its progress.

It made $750m (367m) between March and June, as against a loss of $317m in the same period a year ago.

The news came as Ford said that it was talking "in greater detail" to parties interested in buying its UK Jaguar and Land Rover divisions.

Analysts believe a private equity buyer is most likely to buy the marques.

Ford did not name the contenders, although they are thought to include India's Tata Motors.

It also said that a strategic review of its Volvo business would probably be completed by the end of the year.

Selling assets

Ford's return to profit surprised Wall Street because, like other US carmakers, it has struggled to compete with Asian rivals.

Rising petrol prices have boosted Asian firms in recent years, as buyers opt for more fuel-efficient vehicles.

Most US carmakers have suffered from the decline in demand for so-called "gas-guzzling" sports utility vehicles (SUVs) and trucks.

Ford has been selling assets such as Aston Martin to offset heavy losses - and the proposed disposal of Land Rover and Jaguar is seen as a continuation of this policy.

The firm needed to offload its luxury car brands to secure the rest of the business, analysts have said, and it is estimated that the sale of Jaguar and Land Rover could raise as much as $1.5bn (750m).

The two businesses employ about 16,000 workers in the UK and Ford said that it "fully understands its responsibilities, not only to its employees but also to its local communities".

Land Rovers are made at Solihull, while Jaguar has a site at Castle Bromwich - both in the West Midlands.

The two also share a site at Halewood on Merseyside.

Among the investment firms expected to bid is Cerberus Capital Management, which bought the Chrysler Group from DaimlerChrysler in May.

Ripplewood Holdings, a group headed by former president of Chrysler, Thomas Stallkamp, is also reported to be interested.

Earlier this month, Ford denied that it was in talks about selling off its Swedish carmaking division Volvo, which it bought in 1999.

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