China’s publicly traded automakers are expected to report that their net profit more than doubled in 2006, thanks to strong sales and merger-and-acquisition activity, a news agency said on Thursday.

China’s auto industry rebounded last year after suffering a two-year slowdown, as the booming economy and the wealth from a stock market rally boosted vehicle sales by 25% over the year before to a record 7.2m units, The Associated Press (AP) noted.

Shanghai Automotive, which has partnerships with General Motors and Volkswagen, is expected to report a 2006 net profit of 2.4bn yuan ($310m), up from 1.10bn yuan ($142m) in 2005, according to a poll of seven analysts by Dow Jones Newswires, AP said.

The report said the strong earnings growth is largely attributed to the company’s enlarged manufacturing capacity after it bought about 20bn yuan ($2.6bn) worth of car-manufacturing assets from its state-owned parent – including stakes in its joint ventures with GM and Volkswagen.

The news agency said minicar maker Chongqing Changan Automobile announced earlier that its 2006 net profit likely more than tripled from the previous year due to a large increase in net profit at Changan Ford Mazda Automobile, its joint venture with Ford and Mazda.

Ping An Securities analyst Yao Hongguang expects the company’s 2006 net profit to rise to 733m ($95m), from 237m yuan, the Associated Press said.

FAW Car, based in the north-eastern city of Changchun, is likely to post a 16% rise in 2006 net profit to 391m yuan ($50.5m), up from 338m in 2005, according to a poll of six analysts by Dow Jones Newswires, AP said.

The news agency said analysts forecast that net profit at most of the big Chinese automakers should double again this year, buoyed by rising demand and opportunities for acquisitions.

According to industry forecasts, China’s auto sales are expected to top 8m units in 2007, the report added.