Struggling Japanese auto maker Nissan Motor Co said yesterday it climbed back into the black in the latest quarter and predicted a smaller yearly loss thanks to soaring demand in China.

The country's No. 3 car company posted net income of 25.5 billion yen (US$270 million) in the July-September period after three straight quarters in the red.

The result was 65 percent lower compared to last year but far better than Nissan's 16.5-billion-yen loss in the April-June quarter.

Sales totaled 1.87 trillion yen and operating profit came to 83.3 billion yen. The firm sold 901,000 vehicles in the quarter, down 6.8 percent from the previous year.

"Our performance in the first half of fiscal 2009 is encouraging, demonstrating that Nissan's recovery plan is on track," President and CEO Carlos Ghosn said in a statement. "Our outlook will remain cautious until we see evidence that economic recovery can be sustained in world markets."

Robust business in China, as well as government subsidies that have lured more buyers around the world, contributed to the results.

Recovering demand led Nissan to lift its estimates for the full fiscal year through March 2010.

It now expects a narrower net loss of 40 billion yen compared with its previous estimate of a 170 billion yen loss, with revenues pegged at 7 trillion yen. Nissan also raised its global sales forecast from 3.08 million vehicles to 3.3 million vehicles.