Nanjing Automobile Group said it has set the price range for its MG 7 cars, which are built using technologies it bought from the UK's defunct MG Rover, at 171,600-302,800 yuan or £11,309 - £19,956.

Nanjing Auto will officially launch the MG 7 series next month, the company said in a statement.

Nanjing Auto started production of the MG in March, with annual capacity projected at 200,000 vehicles and 250,000 engines.

Its rival Shanghai Automotive Industry Corp unveiled last October its 'Roewe 750', a vehicle based on the Rover 75 model saloon, with prices set between 231,800-276,800 yuan (£15,281 - £18,246).

The new cars launched by the two companies directly compete with each other due to similar content and origin.

SAIC and Nanjing Auto went head-to-head in bidding for the collapsed British car maker MG Rover Group in 2005.

SAIC ultimately acquired the technologies of Rover's 25 and 75 models and their engines, while Nanjing Auto bought the remaining assets, including the MG brand division.

The two Chinese auto makers last month signed a letter of intent to form a strategic alliance to cooperate on business areas ranging from vehicle manufacturing to services, with the possibility of a 'complete union' in the future (£1 = 15.1686 yaun).