Tata and Valeo are both in early negotiations to acquire a stake in Visteon.


According to a report in Indian newspaper, Business Standard, the two parties are waiting for authorisation from Visteon to allow them to start due diligence.


A share could cost between $US1.5 and 2.0bn, said the report.


Reuters reported last month that Valeo had considered a possible tie-up with Visteon, before deciding that an all-out merger would carry too much risk. CEO Thierry Morin has since indicated that Valeo would be interested in looking at any assets that Visteon or may put up for sale, but would not buy the entire company.


Valeo is also reported to be exploring options, including a leveraged buyout of Visteon, after talks with UK-based auto and aircraft parts maker GKN failed.