FAW Car Co Ltd reported net profit more than tripled in the first quarter this year on strength of sizzling car sales and cost reductions.

FAW Car, the listed unit of the nation's second-biggest car maker, posted net income of 311.76 million yuan (US$45.2 million) from January to March, an increase of 261.08 percent from a year earlier, the car maker said in its statement to the Shenzhen Stock Exchange today.

Changchun, Jilin Province-based FAW Car posted revenue of 4.9 billion yuan, representing a 71 percent increase year on year.

Sales increased 70 percent to 280,000 units, outpacing the 22 percent growth in the overall passenger car market.

A growing economy has made cars more affordable to Chinese customers, prompting car makers to expand capacity and launch new models to tap rising demand.

FAW Car earlier said it would spend 575 million yuan to update assembly lines and add another 60,000 units to production capacity.

The company plans to make use of additional production to make new models including a Mazda 6 wagon and other B-segment models within one-and-a-half years.

FAW Car will also build more Besturn models, which were self designed, at a cost of 821 million yuan through 2009 due to growing demand for homegrown vehicles.

The central government has encouraged the development of the domestic auto industry.

(Shanghai Daily April 28, 2008)