Staff look at a new MG 7 car during the MG car launch ceremony at Nanjing Automobile Group in Nanjing, east China's Jiangsu province on Tuesday. - REUTERS

NANJING, China, (Reuters):

A venerable British motor brand was reborn in a gritty Chinese industrial suburb on Tuesday as state-owned Nanjing Automobile Group rolled out its first MG sports cars and saloons.

A racing green MG TF two-seater convertible, a copy of the popular original British model, was unveiled at a plant in the eastern city of Nanjing - the first Made-in-China MG car.

Nanjing Auto, a medium-sized car maker that began life as a military garage in 1947, will use the MG marque founded in the 1920s to target China's fast-growing ranks of wealthy buyers.

Original British Flavour

"We are keeping the original British flavour," said Zhang Xin, general manager of Nanjing subsidiary making the cars. "But in the future, the major market for MG will be in China."

Two models of the MG 7 series saloon, based on the original MGZF model, were also revealed to a 1,000-strong audience of Chinese government officials and global media.

MG cars built in the Chinese plant and the former MG Rover plant at Longbridge in the English Midlands, which Nanjing Auto plans to restart in May, will also be sold in Europe.

Nanjing has signed a letter of intent to make MG cars in the U.S. state of Oklahoma, in a project that could involve $2 billion of state, local government and private investment. Zhang said talks were ongoing and an announcement would be made once a final decision had been reached.

Priced at between 180,000 yuan and 400,000 yuan ($23,255 to $51,710), the MG cars will be beyond the reach of most Chinese, costing well over two years' salary.

Break even

But Zhang said incomes in China were rising so fast that Nanjing Auto reckoned it could break even on the MG project in little more than a year, and hoped for global sales of 200,000 MG-brand cars annually after five years.

Nanjing Auto surprised the industry when it outbid China's biggest car maker, SAIC Motor Corp., to win the MG brand in 2005, paying 53 million ($104 million) for the assets of MG Rover after the British firm collapsed with debts of 1.4 billion.

The acquisition underlined the hunger of Chinese auto makers to produce higher-end models and expand into developed markets.