Nanjing Automobile is edging closer to committing itself to production at Longbridge, home of collapsed car maker MG Rover whose assets it is buying.

An announcement had been expected from the state-owned carmaker yesterday but still awaits clearance from China. "We were hoping to make an official statement about the future of Longbridge today. We are not able to do that but as soon as we are, we will," a spokesman said.

Nanjing last week beat its much larger rival Shanghai Automotive Industry Corporation to acquire the assets of MG Rover and its sister company, the engine maker Powertrain. It said then that it would set up a manufacturing and research facility in the West Midlands, but without being more specific about the actual location.

It has yet to commit itself to Longbridge but it has had discussions with St Modwen, the property group that owns much of the 330-acre site.

Nanjing's plans are to build a UK manufacturing base capable of producing more than 80,000 MG cars, beginning with the existing MG TF sports car. But the bulk of the Longbridge production lines will be switched to China.

The timescale for the creation of the UK business is unclear, with some estimates suggesting that the start-up of production could be 18 months away.

Nanjing is trying to recruit a management team to run its UK operations and is understood to have held talks with potential recruits yesterday. It is also likely to seek corporate partners to help fund its development in Britain.

The longer the delay in making a formal announcement about where and when it intends to start manufacturing, the greater the scrutiny its strategy will come under.

One possibility is that it could still find a way to cooperate with SAIC, with whom it was a junior partner in the original joint-venture talks with MG Rover.

However, relations between the two camps are understood to remain cool in the aftermath of the battle for MG Rover's assets.

SAIC said yesterday that it remained "completely committed" to building a European presence as part of its ambitions to become a player in the global car industry.

The company said that it was continuing to explore its options in collaboration with Magma, run by former Ford of Europe boss Martin Leach, with which it made the unsuccessful bid for the MG Rover assets.