Tata Motors, India's third-largest car maker, and MG Rover have decided to continue their joint venture commitment for CityRover cars, the two companies said in a statement on today.

MG Rover signed an agreement in December 2002 with Tata Motors to buy 100,000 Indica hatchbacks – called the CityRover in the UK – over five years to sell in Europe, but Tata had said earlier this month the deal could dissolve if MG went ahead with a proposed Chinese venture.

The statement said the CityRover project will gather momentum with the launch of new products and entry into new markets. The decision was taken after the annual business plan review.