Britain's last major carmaker MG Rover collapsed on Friday, putting 6,000 jobs at risk after it failed to secure an alliance with a potential Chinese partner, the British government said.
Tata Motors, which has an export deal with MG Rover, however, said it was unperturbed over its British partner going into receivership. Receivership is a form of bankruptcy protection under which a court-appointed third party takes control of the business.
Tata Motors had entered into an arrangement with Rover in 2002 to export 100,000 cars made on the Indica platform to the British company to be sold under the City Rover brand name for five years.
A source in the agency that handles Tata Motors' public relations said: "Tata Motors also has its own distribution channel in the UK to sell pick-up vans and the Safari."
According to the source, Tata Motors' fortunes are not tied to Rover's fate. The source said Tata Motors would formally announce the impact of the collapse of Rover after assessing the situation. "We understand that last ditch efforts are made to save Rover," the source added.
The 100-year-old carmaker had gone into receivership, UK's Trade and Industry Secretary Patricia Hewitt told a news conference late on Thursday.
"MG Rover has announced that their board has decided to call in the receivers. This is a devastating blow to everybody involved -- the workers and their families, the company's suppliers and the wider community," Hewitt said.
The move came after China's Shanghai Automotive Industry Corporation said it would not invest in the company.
"In the end, SAIC made it clear that they were not confident about the future solvency of MG Rover, and, therefore, there was no reasonable prospect of a deal," she said.
The collapse could impact 6,000 staff and thousands more supply jobs, creating a political headache for the British government in the run-up to a general election on May 5.
Hewitt said the government could not give MG Rover a £100 million loan without the prospect of a deal with the Chinese automaker.
"This is an issue between the government and MG Rover," an SAIC spokesman said.
"We have said a deal would not be possible until Phoenix Venture Holdings (Rover's holding company) were able to secure the solvency of MG Rover for the period of 2 years and that hasn't been met," the spokesman said.
MG Rover was forced to stop production on Thursday as suppliers suspended deliveries over fears they would not be paid.
"This is a deeply worrying time for everyone," an MG Rover spokesman told the media. "We have asked PricewaterhouseCoopers to accept engagement to advise the board of directors on the current position of the company."
MG Rover, a former British icon dating back to 1905, was sold to Germany's BMW AG in the 1990s before returning to British hands when it was sold to Phoenix four years ago.
The collapse of MG Rover is a severe blow to Britain's car making industry. Ford, which owns the luxury brand Jaguar, cut jobs and scaled back production in England last year.
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