SHANGHAI -- Shanghai Automotive Co. Ltd., owner of a fifth of General Motors' car plant in the city, said on Wednesday net profit in the third quarter soared 140 percent on booming demand.
Earnings rose to 484.57 million yuan ($58.54 million) in the July to September period from 202.01 million yuan a year earlier, while revenue rose 22.8 percent to 1.8 billion yuan.
Analysts said cut-throat competition in the world's fastest-growing major car market had forced Shanghai Auto to keep an eye on costs.
"We have strengthened cost control and falling costs contributed to a steady increase in operating income," the company said in a statement in the Shanghai Securities News.
China is increasingly a focus for global auto makers seeking to escape depressed or saturated home markets, with the country's car output on track to hit two million for the year after breaching the million mark for the first time last year.
But foreign car makers have announced plans to more than double production over the next four years, raising fears of a margin-slicing glut, but they hope economic growth of eight percent in the world's most populous country will soak up the additional output.
Car output surged 87.2 percent to 1.44 million in the first nine months year on year, overtaking that for all of 2002.
Shanghai Auto mainly makes vehicle parts and is the listed unit of China's top car maker, Shanghai Automotive Industry Corp.
The company did not offer an earnings outlook, but analysts have forecast a 49 percent annual rise in 2003 net profit to 1.89 billion yuan, according to BOC International.
Shanghai Auto generates over 30 percent of its profit from its stake in the venture with GM, analysts say, and supplies parts for SAIC's other venture in Shanghai with Germany's Volkswagen AG.
Both ventures have reported strong sales growth so far this year, with Shanghai GM moving 133,000 units in the January-to-September period for a 62.2 percent year-on-year rise.
Shanghai Auto's yuan-denominated A shares, open to Chinese investors and selected foreigners, edged down 0.47 percent to 12.84 yuan by midday on Wednesday, versus a 1.17 percent drop in the broader market.
Its shares have risen 87.4 percent since the start of the year, with the galloping auto industry in favor since late 2002.