Workers in the Midlands fear further job losses amid rumours iconic British car maker Jaguar Land Rover could be bought by the French.

The company, which employs 40,000 people in the UK, racked up losses of £3.4billion between October and December, according to leaked documents.

The luxury car maker, which is owned by Indian firm Tata, is said to be in talks with Peugeot and Citroen owner Groupe PSA about a possible takeover.

In January, JLR – which also makes the Range Rover – confirmed it would axe 4,500 jobs, with most coming from its UK workforce, on top of another 1,500 job cuts announced last year.

The following month, JLR posted the biggest quarterly loss in Indian corporate history – amounting to £3.4billion in the final three months of 2018 – as sales plunged in China.

Dr Charles Tennant, who is a former chief engineer at Land Rover, has said he warned the company was 'in a death spiral of its own making' and that owners Tata would either have to 'fund massive losses and investment now or sell up'.

Leaked information suggests a sale of struggling Jaguar Land Rover to French car group PSA could be imminent. Pictured, staff gathered outide the Jaguar Land Rover site in Halewood, Knowsley, Merseyside, after job losses were announced earlier this year

Dr Tennant told The Coventry Telegraph: 'I fear it is now inevitable that Tata Motors will offload, especially now that their home Indian operations seem to have been turned around and are profitable again.'

He added: 'I'm afraid that the next stages will be drastic and painful with the inevitable rationalisation of product and production sites, whilst planning for future electrification.'

Any deal with PSA would raise fears of cuts to production in the UK and further job losses, which would be a major blow to the UK's struggling car industry.

PSA, which already owns British car maker Vauxhall, is 14 per cent owned by the French government.

The sale process is at an advanced stage, it was reported, with a document that outlines the benefits of joining forces already doing the rounds at both companies. Jaguar Land Rover (JLR) was bought from Ford by Indian industrial conglomerate Tata for £1.1billion in 2008.

It made a lot of money in the early years, but has struggled since the diesel emissions scandal at Volkswagen in 2015, which led to a worldwide fall in diesel car sales, and because of a fall in demand in China.

In late April, JLR said it would build the next generation of Land Rover's 4x4 Defender in Slovakia rather than Britain. The decision to build the iconic British car abroad was a bitter blow to many.

Tata denied the latest reports. A spokesman said: 'We do not comment on media speculation. But we can confirm there is no truth to these rumours.'

PSA said: 'If an opportunity comes, like Opel-Vauxhall, we will consider it.'

Jaguar Land Rover has been struggling in recent months, making redundancies across its business and cutting back production at its plants. Pictured, a Jaguar E-Type Series 1 Roadster introduced 1961 - 1998

In 1951 Land Rover was handed a Royal Warrant by King George V11, and over the generations many of the Royals been transported in the vehicles. Pictured, The Queen and Prince Philip in a Land Rover on a Commonwealth visit to Australia, 1954

Tory MP Gavin Williamson, whose South Staffordshire constituency is home to JLR's engine-making factory, said last night: 'I'd have concerns about any change of ownership for JLR because they're such a big employer, not just in the West Midlands but right across the whole of the UK.

'They're very clearly the jewel in the crown of manufacturing in the United Kingdom.'

Des Quinn, Unite's national officer for the car industry, said: 'We will be seeking an urgent clarification from both Jaguar Land Rover and PSA.

'Our paramount concern are the livelihoods of our members who have worked hard to ensure the success of both Jaguar Land Rover and Vauxhall.

'The industry is undergoing a period of major change driven by environmental and technological developments, but to succeed it has to take its workforce with it.'

Jaguar Land Rover has been struggling in recent months, making redundancies across its business and cutting back production at its plants. A Jaguar and Land Rover are pictured at a show in Los Angeles

It is understood a 'post-sale integration document', which outlines the benefits of the two companies joining forces, is already in circulation and the firms are exploring the detail of cost savings after a tie-up.

Indian company Tata Motors denied the report, which cited sources referring to an internal 'post-sale integration document', describing cost savings.

'As a matter of policy, we do not comment on media speculation, but we can confirm there is no truth to these rumours,' said a spokesperson for the Indian carmaker, which owns 100 percent of JLR.

Jaguar Land Rover has been struggling in recent months, making redundancies across its business and cutting back production at its plants.

PSA shares jumped after publication of the documents, before falling back after Tata released its statement, and were down 2.85 percent as of 2.31pm GMT.

'On principle we are open to opportunities that could create long-term value for PSA Group and its shareholders,' said Alain Le Gouguec, a spokesman for the Paris-based manufacturer.

PSA is setting new profitability records even as it continues to integrate Opel/Vauxhall, acquired from General Motors in 2017, and has previously signalled openness to further acquisitions.

The relative fuel-efficiency of its vehicle technologies is a valuable asset as carmakers battle to meet tougher European emissions targets and avoid huge fines.

Jaguar Land Rover became the UK's largest car manufacturer in 2016 but sales have declined precipitously in china in the last year, previously the firm's biggest market

Prince Harry became the first person to enjoy a sneak-peek at Land Rover's long-awaited next generation Land Rover Defender with Dutch Invictus Games medal winner Jack Pastora

JLR, by contrast, faces one of the toughest challenges to comply with looming carbon dioxide goals - compounded by the uncertainty and disruption of Britain's protracted departure from the European Union.

Tata posted a record $4 billion loss for its fiscal third quarter ended Dec. 31, and warned that JLR would swing to an operating loss in the full year to March.

A spokesman for PSA- told the Press Association that the firm was in 'no hurry' to make acquisitions and could 'stand alone'.

However Pierre-Olivier Salmon added: 'If an opportunity comes, like Opel (Vauxhall), we will consider it.'

Jaguar Land Rover became the UK's largest car manufacturer in 2016 but sales have declined precipitously in china in the last year.

Sale in China dropped 44 per cent between July and September last year - turning China from its biggest sales market to its smallest.

The origins of Jaguar can be traced back to The Swallow Sidecar Company which began making motorcycle sidecars in 1922. The Swallow Sidecar Company moved into car manufacture, and switched its name to Jaguar after the Second World War. Pictured the Jaguar Xj220

The company pointed to a downturn in China as a reason for the job losses and lower demand for the diesels which make up most of its products.

In the UK, 'continuing uncertainty related to Brexit' was blamed.

In February, it revealed a hefty quarterly loss of £273m in the three months to December 31, 2018.

PSA, meanwhile, has been flourishing since it bought Vauxhall-Opel in 2017.

It has returned the struggling brand to profit in less than two years and is cash-rich with revenue up 18.9 per cent in 2018 to £63.7m.

PSA chairman Carlos Tavares has made no secret of his desire to acquire the UK-based luxury car manufacturer.

Jaguar Land Rover pointed to a downturn in China as a reason for the job losses and lower demand for the diesels which make up most of its products. Picture shows a Range Rover Jaguar and Land Rover Special VIP Preview, Los Angeles

During an interview with Autocar India in April, he said he believed it would be good for PSA to have a luxury brand and that the company was 'considering all opportunities'.

Sources inside JLR have told the Press Association that despite public statements downplaying the prospects of a tie-up, 'things are moving quickly behind closed doors'.

One insider, who has seen the integration paperwork, said: 'To have a document like this in circulation at the two firms points to the fact things are very far down the line with either a sale or acquisition.

'Just look at how close the two firms are in the UK - the two head offices in Coventry and Gaydon are just 25 miles apart and both firms make cars in the UK.

'There are plenty of ways the two companies could save money by working together.'

Automotive industry expert Professor David Bailey of the Birmingham Business School believes the tie-up could be a good fit for both brands.

The Tata Motors owned firm has been a target of PSA, owner of Peugeot, Citroen and Vauxhall, for several months

He said: 'PSA said last month it was interested in acquiring JLR but [its owner] Tata publicly ruled out a sale.

'Tata shareholders' patience may be wearing thin, though, given recent JLR losses. A partial sale may be an option.

'I'm sceptical about JLR being able to go it alone bearing in mind the need for very high research and development spend on new technology given that the auto industry will transform itself in the coming years towards connected, autonomous electric cars.

'At some point JLR may have to collaborate with another auto firm. A partial PSA stake might open that up.'

In February shares in India's Tata Motors sank by almost 30 percent after problems at Jaguar Land Rover unit dragged the luxury carmaker to India's biggest quarterly loss.

It announced a net loss of around £2.9 million for the quarter ending December owing to a $3.9-billion loss on JLR.

That compared to a profit of £132,000 loss for the same period a year before.

In late April JLR said it will build the next generation of Land Rover's 4x4 Defender in Slovakia rather than Britain. The decision to build the iconic British car abroad was a bitter blow to many.

Today Prince Harry became the first person to enjoy a sneak-peek at Land Rover's long-awaited next generation Land Rover Defender in the Netherlands.