A private equity turnaround of Jaguar and Land Rover would be painful and unpleasant - and more difficult than a similar rescue of MG Rover, it was claimed yesterday.
Jon Moulton, managing partner of Alchemy Partners, said the two companies would be better off in the hands of a "deep pocketed" trade buyer - although job losses would be inevitable.
But he thought only private equity companies would come to the fore in the sale by the luxury carmakers' parent Ford.
Four private equity groups - TPG, Ripplewood, Cerberus and One Equity - are in the race to buy Jaguar and Land Rover, in competition with Indian industrial conglomerates Mahindra & Mahindra and Tata.
Mr Moulton, who had failed in his bid to buy MG Rover from BMW in 2000, thought it would be a struggle for the Indians to buy Jaguar-Land Rover, which have a price tag of around £1.5 billion.
He said: "This is a very big, very difficult deal. Jaguar is very cash negative and has been for a very long time and looks like it will continue to be for some years forward.
"Land Rover has a more mixed financial history, but also isn't very cash positive going forward.
"Whoever buys it is going to be taking on one whacking great pension fund, a large number of people and a guaranteed need for a lot of fresh funding.
"I cannot see anyone but private equity who will buy it; I don't think anyone else can. None of the trade buyers seem interested."
Mr Moulton - whose firm is not among the private equity bidders - thought the companies could be turned around, albeit not without pain.
"The politics might be harder than when we looked at Rover.
"Rover was in some ways easier because you were admitting you couldn't solve the problem, and trying to save the piece that was viable - the MG sports car business.
"The Rover plan was easier and more credible than anything I can write down for Jaguar. There is such a tremendous amount to do, and you don't have the benefit like we had with Rover of an enormous dowry."
Mr Moulton thought Jaguar and Land Rover would be bought by an American distress specialist like Cerberus.
"They seem to have more of an appetite and scale for it. Cerberus bought Chrysler, which is a very gutsy deal too; that has large legacy problems and is in need of large amounts of cash.
"They have got the risk tolerance for it; whether they have the competence for it, time will tell. Most things can be turned around; you could of course raise the Titanic."
But any rescue was bound to involve job losses at the two firms which together employ 15,000 people in the Midlands.
"It is very hard to see any medium term plan which does not involve very substantial loss of jobs. Probably one or more plants would have to go, which would be very painful.
"The number of models produced by Jaguar probably has to be constrained.
"They need to probably make it smaller in the case of Jaguar, get it to be more exclusive machines again and try to restore the cache they lost when the downmarket Jaguars appeared to be Mondeos with a Jaguar badge."
New models and technology could also help, although this would prove expensive said Mr Moulton, who was speaking before he addressed the Institute of Chartered Accountants of England and Wales in Birmingham yesterday.
"Land Rover is much easier - it has a clear market position, but faces formidable competition. It could be done. It is still a daunting job even with doing some pretty unpleasant and tough things."
Even after such measures, a private equity buyout could fail to revive the two marques, he said.
"There is a very fair chance of failure. The ideal solution from the point of view of the people who work there is one of the more prosperous automotive firms buys it. At the moment that seems to be an unlikely event.
"They will have very deep pockets to make sure the thing worked in some form or another. Toyota can't buy it, but if they did, they have enormous cash flow, tremendous technical resource, they can route engines, gearboxes, suspensions, from the rest of the group.
"It would open up so many more options that the survival of some or the greater part of the business would seem more likely."