China's auto industry posted a 63.87 percent profit growth year-on-year to reach 22.004 billion yuan during January-August period, outpacing the 29.87 percent growth in sales revenue.

Latest figures released Thursday by the China Association of Automobile Manufacturers show that the auto industry ended profit declines it had experienced since 2004.

The turning point comes as domestic demand for automobiles surged while steel prices dipped, say industry insiders.

Encouraged by hefty demand, inventory growth slowed, ending August, with a year-on-year rise of 12.44 percent, 4.29 percentage points lower than a month earlier.

The outlook remains rosy says the Huiyu Rating Agency.

Insiders said runaway housing prices notably in downtown areas have indirectly fueled car sales as people are commuting from their suburban homes.

Exports of commercial vehicles also nurtured the industry. Truck exports in the first eight months jumped 52.2 percent to reach 95,600 vehicles worth 604 million U.S. dollars. Passenger vehicle exports reached 14,400 units worth 296 million US.dollars.

Up to 97.4 percent of the automobiles produced in the past eight months have been sold, industry figures showed

Automakers Chang'an and Xiali report they have doubled net profits in the nine months ending September.

Researchers warn, however, that oversupply could still plague the industry which also faces the prospect of rising steel prices. The future of the auto sector remains complex, they say. .

Source: Xinhua