Car giant MG Rover is to build a new model at a factory in India.

The new small car will be built to Rover's design and engineering standards and will be sold throughout the UK and Europe later next year.

Union leaders expressed surprise at the move and said they would be seeking urgent talks with MG Rover to see how workers in this country would benefit.

MG Rover, which employs about 6,500 workers at its plant in Longbridge, Birmingham, said the new car will be built by Tata Engineering at its factory in Pune.

The model, which has not yet been named, will be based on Tata's Indica car which is currently built at the plant.

Kevin Howe, chief executive of MG Rover, said: "This new car, which will fit perfectly in to our existing product portfolio, will reach a whole new customer base.

"We are delighted to have concluded this manufacturing agreement with Tata Engineering. The Pune factory has state-of-the-art facilities and a highly skilled and dedicated workforce."

Ratan Tata, chairman of Tata Engineering, said: "We are very pleased to be manufacturing MG Rover's new small car at our plant in Pune and see this as a great endorsement of our engineering and manufacturing expertise."

Tata is major conglomerate, based in India, with interests including steel, communications, chemicals, hospitality and IT as well as car production.

Tony Woodley, deputy general secretary of the Transport and General Workers Union, said he believed collaborative deals should benefit both parties.

"I just don't see anything in this for us," he said.