Chinese car maker Shanghai Automotive Industry Corporation (SAIC) is convinced it will be the first to produce Rover cars in the People's Republic, despite the sale of the collapsed company's UK assets to rival Nanjing Automobile two weeks ago.

Sources close to SAIC said last week: 'We are going to be making (Rover) 75s in China early in 2006. We will have cars in production in China by then, and we believe that will be well before Nanjing.'

SAIC is confident that if it does get in first, using either the Rover brand with permission from BMW or another marque, it will cripple plans by Nanjing to make the cars there under the Austin name.

SAIC and Nanjing, once partners in the proposed joint venture with MG Rover's former owner Phoenix Venture Holdings, are at daggers drawn after the sale of the assets by administrator PricewaterhouseCoopers (PWC). SAIC owns the intellectual property rights to Rover models and Powertrain engines, but Nanjing believes it is entitled to build MG versions of them. Nanjing's timetable for production is not finalised, and it could take some time to ship equipment to China and start work.

The thrust of SAIC's legal activity is directed at PWC which, it believes, ignored its offer although it was worth more. SAIC's lawyer Baker & Mackenzie has written to PWC setting out its concerns.

SAIC remains bullish about its plans for selling cars in China by the end of next year and dismisses speculation that it could be forced to unite with Nanjing by the Chinese government.

'We always intended to build our own plant for 75s,' said a SAIC source. 'The reason the assets were sold for £50m in the UK is that the cost is in decommissioning, shipping and recommissioning them in China. That costs a lot, and it will take at least a year.' The source said SAIC had ordered equipment to make 75s, 25s and the K series engine. He said talks with BMW about using the brand were an option.