Nanjing's plans for the MG Rover plant at Longbridge could be a prelude to a bid to the DTI for funding, writes Manufacturing Editor John Revill...
It seems the naysayers were wrong after all.
Only a few days ago, industry experts talked about the Chinese killing off Longbridge, with no car production in the UK.
It was assumed that because Nanjing Automobile had not announced its plans it was preparing for the ultimate lift-and-shift operation, leaving nothing behind in Birmingham.
However, the fat lady hasn't started her singing exercises just yet and these bleak predictions now look to be wrong.
Nanjing may not be the saviour of mass-produced cars at Longbridge with a workforce of 6,000 people.
But then again that never was going to happen; to do so would be to repeat the mistakes of the past.
If Rover or BMW especially could not make a success of Longbridge, then how could the Chinese?
Instead Nanjing has looked to leverage some of the advantages of its Chinese production base.
When you pay workers £70 a month in China, it doesn't make much sense to mass produce cars in the UK.
Even so, Nanjing's reluctance to divulge its plans has led to suspicion and a whispering campaign about its objectives. Surely it must have known what it was going to do when it bought MG Rover; you don't just spend £53 million on a whim.
It was also hardly a newcomer to the Longbridge situation, having been involved as a junior partner to SAIC in the aborted joint venture with Rover.
But still it kept its guard up, saying it needed three months to draw up a business plan.
Meanwhile proposals to convert one of the engineering blocks into accommodation for staff and the movement of some of the machinery from Longbridge only fanned the disquiet about its intentions.
Nanjing always said it planned to remove equipment from Birmingham and set it up in China, and it always said it would have some sort of site in the Midlands.
But where, how many jobs, and how much manufacturing would take place there were never answered.
Nanjing has now responded to part of these queries, but there is still a long way to go.
First there is a looming legal battle with SAIC over the intellectual property rights to the Rover 75, 25 and K series engine, which the Phoenix Four sold for £67 million.
Even more pressing is the need for new product. The Rover 25 and 45 are old platforms, more than ten years old, while the 75 is unlikely to recover sales in a market dominated by Audi and BMW.
The star performer - the TF sports car - is also aging, and needs to be replaced and quickly.
Nanjing bought Rover to make a leap from a Far Eastern marque making overseas cars under licence into a global carmaking concern.
It is bit player in the global automotive industry, employing 14,600 people and having assets of £690 million.
In recent years it has not been helped by the relatively unsuccessful partnership with Fiat, which has languished amid weak sales.
In the first five months of 2005, the joint venture sold 14,791 units, just 1.4 per cent of the Chinese market.
So even though Nanjing has formally committed itself to some sort of production in Longbridge, the road ahead remains uncertain.
One industry insider was more even more cautious, saying Nanjing's announcement was a prelude to an approach to the Government for money.
He said: "They are a small company and developing new cars is a very expensive business. They have got a product at the moment which will last them six months to a year at most, and then the motor industry will start baying for blood.
"It needs investment, from the British Government, the Chinese government or a merchant bank.
"They needed to get some support to raise the money. Keeping their plans secret wasn't going to help them do that."