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MG Rover and SAIC partnership ‘delayed’

MG Rover’s proposed partnership with Shanghai Automotive Industry Corporation (SAIC) has been delayed due to concerns from Chinese regulators, according to

Chinese officials had been irritated by Rover's disclosure of its talks with SAIC in October.

The proposed deal is seen as crucial to safeguarding the future of Rover's Longbridge plant in the West Midlands.

The Observer newspaper said 3,000 jobs could be lost if the deal goes ahead.

SAIC’s proposed £1bn investment in Rover is awaiting approval by its owner, the Shanghai city government and by the National Development and Reform Commission, which oversees foreign investment by Chinese firms.

According to the FT, the regulator has been annoyed by Rover's decision to talk publicly about the deal and the speculation that has ensued about what it will mean for Rover's future.

There has been continued speculation about the viability of Rover's Longbridge plant despite the proposed deal, because of falling sales and dated models.

The Observer said that Chinese officials believe cutbacks will be required to keep the company's costs in line with revenues.

It also said that the production of new models through the joint venture would take at least 18 months.

Neither Rover nor SAIC commented on the reports.

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