Up to 140 jobs could be lost at the home of MG Motor in Birmingham.
The manufacturer's Chinese parent company SAIC has started a consultation with staff at the car plant in Longbridge.
The company said it was conducting an operational review of its factory but did not go into any further details about its plans.
"There had been weeks of rumours. The mood is not good at all... We were told in December that there would be challenges ahead but we didn't foresee this."
In 2016, MG announced plans to stop assembling cars at its Longbridge plant and move production to China.
The facility there now has an advanced design studio, a £4.5 million vehicle emissions testing facility and a virtual reality suite and it neighbours the newly regenerated Longbridge town centre.
A statement from SAIC said: "SMTC is conducting an operational review at its Birmingham base.
"SMTC is currently consulting with its staff to find the most appropriate solution and further updates will be issued in due course."