Tata Motors [Get Quote], which owns Jaguar and Land Rover, is in talks with the UK government on assistance for the luxury units as sales have plummeted.

The visiting UK Business Secretary Peter Mandelson held discussions with Tata Motors Chairman Ratan Tata on the issue, Mandelson told reporters in Mumbai today. He did not elaborate. The government is in "close contact" with Tata Motors, he said.

"The British government will see how we can help Jaguar Land Rover bring about the financial restructuring it's seeking," Mandelson said. Tata group is already taking steps that are necessary in this regard, he said.

Mandelson, a key government official who is widely believed to be the person holding the key to any government assistance for the auto industry, is on a week-long official tour of India, which began on Monday.

Don Hume, director corporate and government affairs, Jaguar Land Rover, told Business Standard in an emailed statement that "the company is seeking access to a supply of credit in a normal commercial way to allow us to properly function as a business and we have been calling for the government to encourage the banks to free credit up."

The company has not asked the UK government for any direct financial aid, either as a company or as part of the United Kingdom automotive industry group that has been talking to the government, JLR clarified. Like the US car market, Britain's auto industry has been hit hard by the economic downturn and a tightening credit market, resulting in huge drop in car sales.

The industry is facing a huge slowdown as a fallout of the banking crisis and turbulence in the financial markets. But unlike the United States where the George Bush-led government had agreed for a direct line of credit for the struggling automotive companies like General Motors, Chrysler and Ford Motors, the government in UK is not looking for any such direct bailout package.

Tata Motors is also struggling to raise finance on its books as overseas as well as domestic equity and debt markets have dried up considerably following the global meltdown.