Italian private equity fund Investindustrial reached a agreement on Thursday with the owner, Kuwaiti investment house Investment Dar, but Mahindra & Mahindra made a higher offer on Friday, leaving the fate of the 98-year old icon of British motor engineering hanging in the balance, sources familiar with the discussions said.

Aston Martin makes the cars immortalised by James Bond films down the decades in Gaydon, Warwickshire, the heartland of England’s early 20th century motor manufacturing heyday.

The company was sold in 2007 by US-based Ford Motor for 479 million pounds ($767 million), to Kuwait’s Investment Dar and another Kuwait fund, Adeem Investment Co.

The consortium was fronted by David Richards — former Formula 1 Benetton and BAR racing boss, who remains chairman.

Aston Martin sells approaching 15 per cent of its DB9, Vanquish and other models in Asia. Wealthy Chinese buyers snapped up 110 cars in 2010 and sales are expected to have multiplied five-fold to over 500 this year.

“Talks are continuing through the weekend,” said one source, who said Investindustrial had bid between 200 million and 250 million pounds ($400 million) for the stake, and is confident of winning the race because it sees its proposal as “technically” superior, including a technical partnership deal with Daimler AG’s Mercedes.

The same source said manufacturing would stay at Gaydon under the Italian proposal.

A spokesman for Investment Dar, which went to the market for a $1 billion debt restructuring last year, was not immediately available for comment, nor could M&M be reached for comment. Investindustrial declined comment. Investindustrial, owned by Italy’s Bonomi family, is not new to luxury motor brands. In 2006, it bought Italian motorcycle maker Ducati and sold it for about 860 million euros last April to Volkswagen’s Audi division.

Mahindra is the world number one tractor make. It also makes more sport utility vehicles than any other Indian motor manufacturer, and controls South Korean car maker Ssangyong Motor Co Ltd.