The newly renamed team tried out a host of drivers for a seat at the team last week at Jerez, with Giancarlo Fisichella, Ralf Schumacher, Christian Klien and Tonio Liuzzi all auditioning for a drive.
Mallya says he will assess who best to offer the drive to over the next two weeks before making an official announcement at the start of 2008.
“I will decide who we will sign," he told The Mail on Sunday newspaper.
“I need to balance talent with experience, and I need to find out how the engineers feel on driver feedback.
“I’ll decide before Christmas – but there won’t be an announcement until the new year."
“The team will have $100m (Â£50m) a year to work with," he said.
“[But] The bottom line is that money cannot buy performance.
“Equally, there’s only so much research and development you can do in one year."