British engineering group and consultancy Ricardo and 150 former MG Rover engineers are aiming to start up production of Rover cars in China, according to The Times.

The paper said the move could lead to the creation of a European research centre in Britain for Shanghai Automotive Industry Corporation (SAIC), the Chinese company that owns the intellectual property rights to make cars based on the Rover 75 and 25.

The Times said Ricardo is working on turning the intellectual rights into production and on creating a range of cars including a stretched version of the 75. Ricardo has formed a separate business unit for the operation, which is based at its Leamington Spa site, and has offered to sell this to SAIC by 2010 to establish a research and development centre in Britain.

When SAIC was in the final bidding round for the assets of MG Rover, which it lost to its Chinese rival Nanjing Automobile Corporation, it said that it intended to use Britain as a European research base, the paper noted.

The Times said Ricardo originally advised SAIC that buying the whole of MG Rover when it was a going concern would be inadvisable because of the carmaker’s pension liabilities, among other issues. SAIC had been in joint venture talks with MG Rover for several months before it grew increasingly concerned about the financial strength of the organisation.

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The paper said SAIC intends to build Rover-based cars in China by the end of this year or the start of 2007 using new equipment. Nanjing has also said that it will soon begin manufacturing cars from the 75 and 25 production lines, which it has shipped from the UK to China from the now defunct MG Rover plant near Birmingham.

When both companies’ cars are produced, there could be a fight over copyright if they look similar, the paper noted.

The Times said both companies are also in talks with BMW, the owner of the Rover brand, about buying the name – Rover is thought to retain some value as a prestige brand name in China.