The Shanghai Automotive Industry Corporation will not be rescuing MG Rover from administration.

But it last night left the door open on the prospect of acquiring parts of the company should it go into liquidation.

SAIC is believed to have already acquired the rights to the Rover 25 and 75 models and to the K-series engine built by MG Rover subsidiary Powertrain for £67 million.

And there has been speculation that it could move in to "cherry-pick" other MG Rover assets.

Options include buying tooling and production lines at knock-down prices and shipping them to China.

SAIC's London-based spokesman, Rupert Pitman, of PR agency Cardew Group, said the company was not interested in holding further talks on its proposed joint venture with MGR while the business remained in administration.

But he agreed the statement left the door open for SAIC to return to the negotiations once the future of MG Rover is determined by the PricewaterhouseCoopers team of administrators.

Industry sources last night stressed that even if SAIC were minded to buy MG Rover out of receivership, time was against it.

The company is owned by the Chinese state and decision-making processes are lengthy.

MG Rover, on the other hand, will run out of cash to pay wages next week unless a deal is struck.

Also, SAIC now has problems of its own, according to reports from China.

The group's stock market-listed business, Shanghai Automotive Co Ltd, announced that it is facing a slump in net profits of more than 50 per cent in the first quarter of the current year.

The company blamed falling sales in China and soaring raw material costs for the decline. It recorded a net profit of £46 million in the first three months of


SAIC profits soared last year on the back of the Chinese economic boom and a big increase in demand for cars.

But the Chinese government is now operating a consumer credit squeeze as it struggles to choke off the country's runaway growth.

Investment houses specialising in turning around ailing businesses were yesterday looking at picking up ailing MG Rover suppliers.