Nanjing Automobile has begun construction of a plant to produce MG Rover cars, as part of its plan to revive the brand, it has emerged.
The company said in a statement that total investment in the project, based in Nanjing province in China will be #200 million.
The plant is expected to make 200,000 cars and 250,000 engines every year, the company said.
Nanjing added that most of MG Rover's machinery and equipment in the UK had already been shipped to China and production was scheduled to start next year.
It paid #53 million for MG Rover in July last year, acquiring its assembly lines, engine technology and many of the firm's models.
Meanwhile it has emerged the company is planning to start selling two MG models in the UK and Spain within the next 18 months.
"Nanjing has chosen the UK and Spain because they were the biggest markets for MG Rover in the past," said Alfonso Saavedra, managing director of Sino Motors.
Sino is a Spanish distributor that has been appointed by Nanjing to distribute its cars in Spain.
Richard Cort, chairman of the MG Rover dealer council in the UK, said Nanjing's cars would be on sale in Europe within the next 18 months.
The Chinese carmaker will be launching its own versions of the MG TF two-seat sports car and MG ZT saloon.
Nanjing's redesigned version of the MG ZT will be called the MG 7.
The MG ZT is a sporty derivative of the BMW-designed Rover 75.
Mr Saavedra said Nanjing also planned to launch a Golf-sized saloon that will be called the MG 5 and is due to be launched in late 2007.
Meanwhile Nanjing's rival Shanghai Automotive has started preproduction on its own version of the Rover 75.
The model is believed to be a complete reskin of the car, with more than just cosmetic changes.