BMW has still to reach a final decision over where it will build one of Britain's most famous car ranges in future. Even though the German group is planning to set up a new English base for Rolls-Royce in 2003, production of the Silver Seraph range could still continue at the Crewe factory now owned by Volkswagen, it was announced at the Motor Show.

'Right now, our preferred solution for the Silver Seraph is to transfer its production to the new plant - but I have no reason whatsoever to reject the offer by Volkswagen to continue production of the car beyond 2002. We are now operating as partners in this venture and we have ample time to see how the partnership develops before making a decision over the Seraph in two to three years' time,' said BMW chairman Bernd Pischetsrieder in his keynote speech.

Rolls-Royce chief executive Graham Morris said: 'I would interpret Mr Pischetsrieder's statement as good news in as much as it still gives us hope that we can at least retain production of this car at the Crewe factory until the end of its model life. As it has only just been launched, that represents a few years of output - and many things can happen over that length of time.'

Volkswagen's ownership of Bentley means Britain's two brands will go their separate ways from December 31, 2002, when BMW will establish its latest UK subsidiary under the name of Rolls-Royce Motor Cars. Until then, it is allowing Volkswagen a free license to use the brand name, radiator and mascot.