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Chinese carmakers head for legal face-off

Chinese carmaker Shanghai Automotive Corporation (SAIC) has not ruled out legal action to stop rival Nanjing Automobile from making two MG Rover models on which SAIC owns the intellectual property rights.

'If anyone infringes on it, then they reserve the right to take legal action," a SAIC spokesman said on Wednesday.

'It is a watching brief at the moment, waiting to see what they (Nanjing) go ahead and do.'

Nanjing bought the assets of MG Rover, a former iconic British carmaker, after it collapsed under debts of 1.4 billion pounds in April.

SAIC lost out to Nanjing in the bidding process but already owned the rights to build the Rover 25 small car and Rover 75 saloon from an earlier deal.

SAIC said in July it was considering all options, including legal action. It cannot take action until Nanjing or another party infringes on the property rights.

Nanjing Automobile has said it plans to revive production at the former MG Rover assembly plant in central England by 2007 and create 1,200 jobs at the site. About 5,000 jobs were lost when MG Rover collapsed.

Nanjing is still discussing its business plan with partners, with an update expected by the end of the year.

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