MG Rover is hoping to boost parts revenue to £250m after setting up a new division.

MG Rover Parts, which will be launched in March, has finalised an agreement with Caterpillar Logistics to develop the commercial benefits of the operation worldwide.

Kevin Hand, MG Rover chief executive, said: “Taking full control of the parts operation is strategically important for the business.

“The full benefit of the additional revenue will be seen in the development of both our company and the dealer network.” Unipart, which has supplied Rover/MG since 1987, will continue to supply parts for cars registered before 1995 and its own all-makes range.