Caterham is to drive forward growth by selling cars through MG Rover and specialist sportscar dealerships. So far, the carmaker is in talks with five dealers, which AM understands includes three European sites and two UK retailers.

If the move proves successful, the Surrey-based firm is planning to strike a deal with up to six UK dealerships before spring 2003. The move is aimed at boosting sales of the sportscar from 600 to 700 units a year.

Caterham is aiming to achieve representation in the north and south-west, building on the success of its sites in Surrey and Leicester. But the deal is also expected to include a range of link-ups with the MG Rover group aimed at driving traffic through showrooms.

This could include the use of Caterhams as courtesy cars for MG Rover drivers and even joint corporate events, track days and new car launches.

One MG Rover source says: “The two companies are not in direct competition with each other. Caterham is an extreme but low-profile brand while MG Rover is a high-profile brand that is not seen to be as hard as Caterham. Both have a different purpose but both complement each other.”

Andy Noble, Caterham sales director says that the deal will be a good fit for the sportscar maker's overall development plans. “We are not trying to conquer the world, we are just trying to bring our product to a wider audience.”

MG Rover secured an exclusive deal to supply Caterham with Powertrain products for an “ongoing period” of years in March.

The agreement allows Caterham to use the MG X Power racing brand on its race cars. Caterham will take MG's 1.4-litre K-series and the 1.8-litre (135PS and 160PS) engines - volumes are likely to total several hundred units a year.

MG Rover and Caterham are also working together on the development of future engines.