Shanghai Automotive Co Ltd, which posted a 44 percent drop in net profit for 2005, posted a higher first quarter earnings due to the buoyant auto sales of its parent's two joint ventures.

Shanghai Automotive, a listed arm of SAIC Motor Corp which is China's second-largest automaker, said net profit rose 47 percent to 223 million yuan (US$27.8 million) from 152 million yuan in the same period of last year.

Its core business generated revenue of 2.08 billion yuan, up 39 percent year on year, said its document filed to Shanghai Stock Exchange yesterday.

SAIC Motor is the domestic partner of General Motors Corp and Volkswagen AG in China while Shanghai Automotive makes parts for the joint ventures.

Shanghai Auto's performance in the first quarter is a turnaround from its first profit decline in five years in 2005.

Net profit slumped 44.16 percent to 1.1 billion yuan last year as the company was struggling with soaring prices of raw materials, price discounts and intense competition.

"Shanghai Automotive's profit was largely contributed by Shanghai General Motors in which Shanghai Automotive controls 20 percent," said Wang Zhihui, an auto analyst at Shenyin Wanguo Securities Co.

Shanghai GM, which toppled Shanghai VW to be China's top auto seller for the first time in 2005, saw its sales accelerate 104 percent to 81,200 units in the first quarter. Its profit totaled about 1 billion yuan, said Wang.

SAIC's other joint venture, Shanghai Volkswagen, sold more than 70,000 units between January and March, a surge of 115 percent from a year earlier.

The booming car sales helped Chinese carmakers drive up 3 billion yuan in profit for the first two months this year, up a whopping 320 percent from the same period last year, said the National Bureau of Statistics.

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