The owners of MG and Rover, the Nanjing and Shanghai auto corporations, are reported to be in talks over a possible deal to create a new MG-Rover group based in China. The deal is said to be backed by the Chinese government, which is hoping to increase the number of export vehicles.

Shanghai Auto currently builds its own version of the Rover 75, labeled the Roewe 750, while Nanjing has just commenced production of the MG TF roadster at the original plant in Longbridge. In a report published in the China Daily newspaper, Shanghai Auto’s Chairman Hu Maoyuan revealed during a shareholders' meeting that both carmakers are hoping to join forces.

Initial proposals would see Shanghai Auto takeover Nanjing Auto with help from the Chinese government, but Nanjing’s boss Wang Haoliang hopes to see a new joint-venture set up. Industry analysts see the merger as beneficial to both sides, especially considering that both build near-identical models that share many parts in common.