Land Rover put all talk of its future aside yesterdayto show off its LRX concept car in the metal for the first time at the Detroit Auto Show, the global car industry's biggest annual expo.

The small car is firmly expected to go into production and to take the sports utility vehicle (SUV) market by storm, according to motoring pundits. A compact, three-door, diesel/hybrid-powered four-wheel-drive vehicle, the LRX is smaller than the current "baby Land Rover", Freelander 2, and, once in production, will extend the 60-year-old manufacturer's model line to six.

Managing director Phil Popham said owners would get fuel economy of 50 mpg and still have all of Land Rover's off-road capabilities.

The LRX is part of the company's planned £700 million investment in sustainable technology over the next five years. This has been shared with all three final bidders for Land Rover and Jaguar, Tata and Mahindra of India and JP Morgan's One Equity Partners private equity group, Mr Popham said.

Tata, which generated huge interest at last week's Auto Expo 08 in Delhi with the Nano, a new "one lakh" (100,000 rupees) small car costing just over £1,000, is known to be Ford's preferred bidder for the two West Midland luxury brands.

"Our expectation is that if we are sold, the purchaser would be investing in the business based on the business plan that the board has presented to them," Mr Popham said after unveiling the LRX.

"That includes the opportunity for this car." Ford chief executive Alan Mulally said last week that he thinks the sale to Tata will take place in the first quarter of this year. Mr Popham said it would take three years for Land Rover to bring a vehicle like the LRX to market because of the technology involved.

It would be smaller and lighter than the Freelander and, because of its proposed premium trim levels, would be more expensive.

The new car would be powered by two-litre turbo-diesel engine and integrated electric rear axle drive, the company said. It could use electric drive alone at lower speeds and retain mechanical drive to all four wheels when needed, the company said.

Mr Popham said Land Rover has to make sure there's demand for the LRX in the 147 countries it does business in before rolling it out.

"We've got to make sure if we are moving into a different segment with a different type of Land Rover, that we actually produce a vehicle that people want to buy," he said.

Ford won't say how much Tata has bid for Jaguar and Land Rover, but the figure is thought to be about £1 billion.

Cash-hungry Ford, which lost $12.6 billion (£6.1 billion) in 2006, but earned $88 million (£45 million) in the first nine months of 2007, is looking to sell the two British brands as part of a global restructuring plan. The Detroit-based group has mortgaged its assets in order to continue operations and expects to return to sustained profitability next year.

It bought Jaguar for $2.5 billion (£1.3 billion) in 1989 and Land Rover for $2.7 billion (£1.4 billion) in 2000.

Land Rover celebrated its best sales year ever last year, selling more than 226,000 vehicles. Mr Popham said that as Land Rover celebrates its 60th birthday in 2008, the LRX "opens up a brand new chapter on our next 60 years".

He added: "The concept delivers the powerful message that we are as serious about sustainability as we are confident about the continuing relevance and desirability of our vehicles. LRX is in every respect a Land Rover, but it's a very different Land Rover."

Design director Gerry McGovern said: "It's a Land Rover that would be comfortable on Bond Street or Fifth Avenue but wouldn't flinch at getting its wheels dirty."