MG Rover Group has signed a business and marketing partnership with Caterham Cars, the specialist British sportscar manufacturer.

The agreement includes an exclusive contract for Powertrain Ltd, its engine and gearbox subsidiary, to supply all power unit requirements for Caterham Cars. Additionally, Caterham will also be able to access MG Rover's powertrain technology and benefits related to the investment in K-series engines.

Commenting on the award of this contract, Gordon Poynter, commercial director, Powertrain Ltd, said: "Caterham has been using K-series for over 10 years in extreme performance conditions. We are delighted that as a result of proven reliability, technology and cost, they have decided to appoint us as their exclusive supplier."

The arrangement also allows Caterham to use MG Rover's XPOWER branding on its racing and high performance road cars.

Speaking at a joint press conference, John Sanders, group marketing director, MG Rover Group said: "Our contract as the exclusive powertrain supplier to Caterham opens up the potential for a much deeper relationship. Fundamentally, we are both in the racing business and our products share the same engines.

"We can therefore both exploit the strength of the XPOWER brand to our mutual benefit. This is going to be a true partnership and we will work hard on initiatives that benefit us both."