James poised to launch Rover bid

David James is talking to companies about selling Powertrain

A group led by businessman David James is set to bid for the entire assets of MG Rover within the next 48 hours.

Mr James hopes to resurrect Rover as a niche car manufacturer but his plans depend on him finding a buyer for the engine design business Powertrain.

Administrators are understood to have given Mr James a couple of days to put forward a firm proposition.

Bids have already come from Shanghai Automotive Industry Corporation and from Nanjing Automobile Corporation.

We believe we can build the MG side of it into a niche car category David James

SAIC is teaming up with former Ford of Europe chief Martin Leach.

In the balance

Mr James said his consortium had the funds in place to bid for Rover.

However, he stressed that his plans hinged on finding an immediate buyer for Powertrain.

"We believe that we can build the MG side of it into a niche car category," he told the BBC.

Mr James said he believed he could persuade other British and international car makers to develop small-scale production at Longbridge, leading to a "very big escalation in employment".

"We don't believe in the mass production concept. We believe in niche products and that is exactly where we are going with our bid," he said.

Administrators PricewaterhouseCoopers are already studying two detailed offers to buy MG Rover, both of which are likely to see production resume at Longbridge.

A decision on a sale is expected within the next week.

Longbridge future

SAIC submitted a bid reported to be worth £60m on Monday.

The Rover 75 could be back in production

It is working in partnership with Magma Corporation, a company set up by Mr Leach, the former head of Ford's European operations. If successful, SAIC aims to establish a manufacturing, distribution and research centre at Longbridge.

It wants to resume production of the MG TF sports car and the Rover 75 saloon and develop new models from 2007 onwards.

It is not known how many jobs the SAIC-Magma bid would create, although it has been reported that it could employ up to 1,600 staff.

Under Nanjing's proposals, production of MG sports cars would restart in the west Midlands - probably at Longbridge - as would the design and manufacturing of high-value saloons.

Nanjing plans to use MG as its main marque in Europe while developing other MG Rover brands, such as Austin, elsewhere.

Chinese shipments

It is understood that both bids would result in some MG Rover assets being shipped to China.

SAIC could relocate engine design and production to China while Nanjing is expected to use Rover's production line to produce small and medium sized cars in its home country.

"Nanjing is bidding for the complete assets of MG Rover and a core part of their global strategy is to retain a strong design and manufacturing capability here in the UK," a source close to Nanjing told the BBC.

MG Rover collapsed in April with the loss of more than 5,500 jobs.