The Oriental Morning Post said SAIC, China's biggest automaker, was in talks with BMW to locally produce the German company's 7 series model in China, citing unidentified SAIC people.

The two sides had explored opportunity to manufacture premium cars in China around 2007, but the talks were suspended because of the global financial crisis, the semi-official paper said.

SAIC said in an emailed statement that it would not comment on market speculation.

A BMW spokeswoman in China said the company had a good business relationship with its partner Brilliance Auto, parent of Brilliance China Automotive Holdings, and had not approached other companies for a new partnership.

BMW and Brilliance make BMW 3 and 5 series in the northern Chinese cities of Shenyang.