The company was formed when BMW sold the car-making and engine manufacturing assets of the original Rover Group to Phoenix Venture Holdings in 2000.

When BMW sold off its interests, MG Rover was bought for a nominal £10 in May 2000 by a specially assembled group of businessmen known as the Phoenix Consortium.

An independent tribunal refused to grant the right to appeal a finding that Deloitte failed to consider public interest, as of November 2013.

[11] In June 2004, it was learned that Shanghai Automotive Industry Corporation had signed a joint venture partnership to develop new models and technologies with MG Rover.

In January 2005, it was revealed that British Prime Minister Tony Blair had intervened to support the alliance between MG Rover and SAIC.

It was later denied by MG Rover Group, although the company admitted that it had engaged PricewaterhouseCoopers, the accountancy firm, to advise on its current financial situation.

On 8 April 2005, British Prime Minister Tony Blair and Gordon Brown, the Chancellor of the Exchequer, and Richard Burden, Labour M.P.

In the media, any news about MG Rover was overshadowed by the Pope's funeral and the problems of the register office marriage of the Prince of Wales and his bride.

The same week, SAIC denied it had ever made an offer to buy MG Rover and threatened to sue anyone who attempted to make the 25 and 75 models.

With no other rescue deal in the pipeline, the administrators were not in a position to seek further funding from the government and announced that redundancy notices to Longbridge staff (who numbered more than 6,000) would be issued.

On 20 May 2005, the Administrators announced that, after considering numerous proposals, they had entered talks with two unnamed "overseas companies" with a view to restarting one or more of the Longbridge production lines.

At that meeting, creditors learned that so little of value was left in the company that there would probably be negligible or even no repayment of its outstanding debt and that, although three bidders were then still negotiating to acquire the company intact as a going concern, the Administrators had instructed their agents to prepare for the piecemeal sale of the very few remaining assets in the event that satisfactory negotiations for the sale of the entire business were not concluded.

On 14 July 2005, it was reported that Magma Holdings, a financial group including former Ford Motor Company and General Motors executives, working in conjunction with SAIC, would be making an offer for the assets of both MG Rover and engine maker Rover Powertrain which, if successful, would see at least some production being restarted at Longbridge, and that talks with the other two interested parties – China's Nanjing Automobile Group and Project Kimber (a consortium of Birmingham businessmen led by David James) – were still in progress.

Nanjing Automobile Group indicating that their preliminary plans involved relocating the Powertrain engine plant to China and splitting car production into Rover lines in China and MG lines in the West Midlands (though not necessarily at Longbridge), where a UK R&D and technical facility would also be developed.

Nanjing Automobile Group was reported to be in exclusive negotiations with GB Sports Cars, a venture by former Rover managers, to re-establish MG production at Longbridge.

In late October, key ex-workers received letters from Nanjing Automobile Corp offering 10 months' work dismantling plant at Longbridge for reassembly in China while talks with GB Sports Cars continued.

However, after announcing that the UK government had not offered any substantial assistance in either grants or loans, Nanjing Automobile was also reported to have begun negotiations with at least two other potential partners, including "a wealthy San Francisco family", and, in early November, Nanjing committed to making every effort "to resume production [at Longbridge] at the beginning of 2007".

[15] SAIC Motor merged with Nanjing Automobile in 2007, whilst nearly three-quarters of the massive Longbridge factory had been demolished and its land sold off - the old South Works is the only part of the plant which has survived.

[16] The DTI commissioned accountants BDO Stoy Hayward to report on the collapse of the company; this took four years to complete at a cost of £14.8 million.

This was possible as Techtronic, the company that held the 427 million pound loan from BMW and was owned by the Phoenix Four, charged MG Rover interest and therefore made a profit.

The Serious Fraud Office declined to mount an investigation into the matter,[23] but Mandelson instructed lawyers to prepare a case to disqualify the key figures at Phoenix from future company directorships.

After production finished, previous owner BMW regained the rights to use the brand, and did so on an all-new car that was launched in 2001: MINI.

[30][better source needed] It was subsequently used for the MG XPower SV sportscar, a higher powered version of the Qvale Mangusta, in 2005.