The Chinese car makers that battled furiously to buy the assets of MG Rover two years ago announced plans yesterday for a partnership aimed at creating their country's most formidable player in the global automotive market.

NAC Group, the parent of Nanjing Automobile Corporation (UK), the company that finally won the struggle over the Longbridge car plant, said it was planning to link up with its Shanghai-based arch rival, SAIC (Shanghai Automotive Industry Corporation).

NAC said the two companies shared a common vision "to jointly build an automotive group that will become the largest world-class automotive group in China".

It added that the group and the MG brand in particular saw cooperation with SAIC "as a major step in securing and delivering its long-term expansion and development prospects".

Wang Hong Biao, chairman of NAC UK, said: "I view this development as a major boost to Longbridge, our workforce and our rapidly developing dealer network. This can only assist and accelerate our delivery of new, world-class vehicles to the UK market and beyond." Mr Wang described SAIC as a competitive organisation, but gave no details as to how the cooperation with his group would work in practice.

SAIC was in negotiations with MG Rover before its collapse in 2005, but failure to reach a deal forced the UK company to call in the administrators. It then became locked in a competition with NAC to acquire the assets of MG Rover and its engine maker, Powertrain. In the end NAC emerged the winner with an offer thought to have been between £50m and £60m.

Much of the production equipment at Longbridge was shipped to China but NAC has taken over part of the plant and has begun production of the MG TF sports car. The new operation employs a few hundred people compared with the 6,000 who worked at the Birmingham car plant before the MG Rover collapse.

The UK company's assets were seen as a valuable acquisition for a Chinese car maker because it gave ownership to technology that could be developed to allow access to western markets. Most Chinese car makers are linked to western partners who are thought unlikely to allow their technology to be used elsewhere.