MG Rover is planning a new year sales blitz in a bid to turn around its poor performance. The manufacturer says it will appoint more dealers and cut car prices as it admitted sales will be below 120,000 this year, the worst for a decade.

It said its plans to link up with Chinese company Shanghai Automotive Industry Corporation are on track for 2005 and that work on a new medium-sized car had started. The Chinese manufacturer is set to receive 70% of the debt-laden company in return for a £1bn investment.

Sales will fall to between 115,000 and 120,000 - around 25,000 less than last year.

The company plans to open an additional 30 sales outlets in the UK in 2005 and to appoint 100 extra dealers across Europe. The City Rover, which had UK sales of 6,000 this year - well below expectation - will be launched in Europe in the first half of 2005.The car will have more specifications but will be cheaper, company officials revealed.

New versions of Rover's Streetwise and 45 models will also be launched and MG Rover is predicting higher sales across Europe as well as in the UK next year.The company did not produce cars at its plant in Longbridge, Birmingham, for four days last month and will take another four days of production out next week to 're-balance' stocks with sales.