UPDATE 1-DuPont mulls sale of car paint business -- sources

* Hired Credit Suisse to advise on the sale -- sources

* Could be worth $3 billion to $4 billion -- source

* Potential buyers could include PPG, BASF, AkzoNobel

* DuPont shares close up 1.3 percent

By Michael Erman and Ernest Scheyder

Oct 28 (Reuters) - Chemical maker DuPont is considering the sale of its lucrative auto and vehicle paint business and has hired Credit Suisse Group AG to advise on the sale, according to sources familiar with the matter.

The performance coatings business primarily sells to Maaco and other auto paint refinishers. Ford and General Motors are also key customers, though selling to so-called original equipment manufacturers (OEM) is not as lucrative.

The sale could net DuPont $3 billion to $4 billion, one of the sources said.

DuPont could sell just the OEM component, keeping the more-lucrative paint refinishing business, said Telly Zachariades, a chemical industry mergers and acquisition specialist at the Valence Group who is not involved in the deal.

"That may be the logical move," Zachariades said. "DuPont may have just concluded they're better spending their money elsewhere and making profit elsewhere."

Potential buyers for all or part of the performance coatings business could include PPG Industries , BASF or AkzoNobel , Zachariades said.

Representatives from PPG, BASF and AkzoNobel were not immediately available to comment.

DuPont's performance coatings unit has seen breakneck demand this year, with sales up 17 percent in the third quarter alone.

The unit's pretax operating income for the first three quarters of 2011 was $210 million, up 14 percent from last year. It had $255 million in pretax operating income for full year 2010.

High energy and freight costs have been a "drag" on the unit recently, DuPont Chief Executive Ellen Kullman said during the company's earnings conference call on Tuesday.

Still, Kullman said the unit has done a "tremendous job" at keeping margins stable near 7 percent. She praised John McCool -- who has run the performance chemicals unit for roughly a year -- for "making great progress" running the business.

DuPont and Credit Suisse both declined to comment.

DuPont's proposed sale was previously reported by Bloomberg News.

Dupont shares rose 1.3 percent to close Friday at $49.36.