Small firms campaigner Russell Luckock says he doubts whether car making will ever resume at Longbridge.

He reckons the cost of production differential between the UK and China will mean even launching a quality sports car operation is unlikely.

And he points to continued wrangling over who owns what between Chinese groups Nanjing and SAIC as a further disincentive to progress.

His comments came as he revealed Chinese and Indian competition was taking ever larger chunks out of the UK's manufacturing sector.

He claims more and more firms are shifting production to the Far East.

Mr Luckock, who runs Birmingham presswork company AE Harris, hit out as he unveiled his latest half-year survey which showed a significant downturn hurting industry.

This month 94 firms reported they were very quiet against 60 at the time of the previous survey in March.

Other figures were - quiet 498 (325); fair 129 (221); busy 21 (36) and very busy five (19).

He does not pretend the survey is scientific but insists it is a good guide to the state of the economy.

Mr Luckock said: "It clearly shows the market downturn. More companies are getting out of manufacturing, moving work to China and acting as import/export traders.

"Manufacturing is being really squeezed."

The few firms doing well were in fire, security and home improvements.

Mr Luckock said the outlook was not good.

"You look at the possibility of making cars again at Longbridge and it seems ever more unlikely as each week goes by.

"The lift and shift has begun and parts are so cheap to make in China that I can't see MG re-starting."

Nanjing has insisted it is looking to develop an operation at Longbridge which could employ up to 1,200 people.

But Mr Luckock said eventually the tide would turn.

" The Chinese workers sooner or later will want the same sort of luxuries British and US workers have. They will want parity. Then there will be opportunities to start manufacturing again in Europe."

But by then the skills would have gone.

Mr Luckock said his firm found it a nightmare to attract young people, but admitted: "I can't blame them."

Manufacturing had sunk below 15 per cent of GDP when 15 years ago it was over half.

Mr Luckock's company, which employs 82, now relies on skilled men past retirement age. "Twelve per cent of the workforce are pensioners," he said.

AE Harris now relies on niche jobs - small-sized ranges which require top quality.

And it also finds itself rectifying problems for manufacturers who are unhappy about Chinese standards.

"We tweak Chinese products," said Mr Luckock. "The Chinese aren't interested if there is a problem."

And he told a story about an inquiry from a business which had bought five million brass washers from China.

The only snag was that 20 per cent had no hole in them. What could AE Harris do about it?

The answer in this case was nothing. "Scrap them," he was told.

But Mr Luckock has some optimism for the next few years.

He said: "There is a future for manufacturing but it is a different sort of future in a different sort of field."

His company was having to go after orders involving bulky or delicate items which customers were more reluctant to put to China. It was also picking up prototyping contracts where full volume would ultimately go to China.

"It is constant movement," said Mr Luckock.