The massive investment, spread over five years, will further establish SAIC as the leading automotive R&D company in China – the world’s largest car market.

SAIC’s European Technical Centre and European Design Centre are based at the MG Birmingham site and it is likely that the UK operation will be involved in parts of the programme.

The huge investment started last year and will continue until 2015. So far almost £2.3bn has been invested, including joint venture projects which SAIC Motor has with both GM and VW.  

The news comes as new records have been set for the sale of MG and Roewe (the China-only brand) cars. In June sales of both brands in China rocketed by 44% to 17,301. Sales of MG and Roewe models totalled 90,035 in the first six months of 2012, setting another new record.

Sales of MG3 cars in China have been particularly strong and the car is one of the biggest sellers in its class. Production of the MG3 for Europe will begin next year at the MG Birmingham site.

Much of the engineering and design work on the award-winning MG6, MG3 and other MG and Roewe models is carried out at the MG Birmingham site. Two years ago SAIC won a major award for its investment in Birmingham.

SAIC Motor has risen from 461st place in the prestigious Fortune 500 World ranking to now stand at the 130 spot.

MG Motor UK is SAIC’s first car operation in Europe and the MG brand is now being introduced to new markets across the world, including Egypt and Uruguay.