New MG Rover built in India

The new MG Rover model will be built at a factory in India, the Birmingham-based company has announced.

The small car, which has not yet been named, will be built by Tata Engineering at its factory in Pune. But it will be based on Rover's design and engineering standards.

The new model, which will be sold throughout the UK and Europe next year, is based on Tata's Indica car which is currently built at Rover's Longbridge plant in Birmingham.

'Skilled workforce'

Union leaders say they are surprised at the move and will be seeking urgent talks with the company to see how MG workers in Britain will benefit. Kevin Howe, chief executive of MG Rover, said the new car would reach a whole new customer base.

"It will also fit perfectly in to our existing product portfolio," he added. "The Pune factory has state-of-the-art facilities and a highly skilled and dedicated workforce."

Ratan Tata, chairman of Tata Engineering, described the introduction of the new car as a "milestone" for both companies. "It is a great endorsement of our engineering and manufacturing expertise and it marks the start of what we hope will be a long and productive relationship."

'Urgent talks'

But Tony Woodley, deputy general secretary of the Transport and General Workers Union (TGWU) said collaborative deals should benefit both parties. "While we welcome anything that cuts costs, there are too many unanswered questions in this case.

"It does not seem like a good deal and I shall be seeking urgent talks with the company." Tata is a $9bn conglomerate based in India which has interests including steel, communications, consumer products, chemicals, hospitality and IT.

It is made up of 80 companies and employs 225,000 people. MG Rover employs 6,500 workers at its Longbridge plant, which produces 170,000 vehicles a year. MG Rover said the deal with Tata was a "positive step for the company" and would benefit all its employees.