The new Rover, based on the Tata Indica platform, will be manufactured to MG Rover’s design and engineering standards, in India, by Tata Engineering, at its Pune factory. It will be sold throughout the UK and Continental Europe by MG Rover’s dealer network. Initial details of the car will follow.

Kevin Howe, chief executive, MG Rover said: “This new car, which will fit perfectly in to our existing product portfolio, will reach a whole new customer base. We are delighted to have concluded this manufacturing agreement with Tata Engineering. The Pune factory has state of the art facilities and a highly skilled and dedicated workforce.”

Ratan Tata, chairman of Tata Engineering said: “We are very pleased to be manufacturing MG Rover’s new small car at our plant in Pune and see this as a great endorsement of our engineering and manufacturing expertise. The introduction of this car will see the achievement of yet another milestone for both companies, and marks the start of what we hope will be a long and productive relationship.”