Ssangyong Motor Co., recently acquired by a Chinese vehicle maker, reported on Friday a sharp fall in quarterly profit, hit by a drop in local sales and after results a year ago were flattered by a tax refund.

According to Reuters, Ssangyong, a sport utility vehicle maker which holds a 9.5% domestic market share, earned a net profit of 3.3 billion won ($2.97 million) for the third quarter to September, compared with 97.5 billion a year ago.

The big fall in profit was partly attributed to a huge tax refund, which bolstered the company's bottom line last year, a company spokesman told the news agency.

Ssangyong reportedly sold 30,993 units in the third quarter, down 5.5% from a year ago but sales in value rose 10.8% to 759.4 billion won, helped by brisk exports of premium recreational vehicles.

"During the third quarter, a stagnant economy hit domestic sales which fell 20% from a year ago but exports jumped nearly 60%," Ssangyong said in a statement cited by Reuters.

The successful entry of the New Rexton SUV model into the west European market was behind the rise in exports along with brisk sales in the Asia-Pacific region and the Middle East, the company reportedly said.

Reuters noted that state-run Shanghai Automotive Industry Corp., which is General Motors Corp's main Chinese partner, last month took control of Ssangyong Motor for about $US500 million.

The move will help Ssangyong build a bridgehead into China's vast market, but has also raised concerns that transferring its technology to SAIC could back fire if the Chinese company rolls out cheaper models that eat into sales of vehicles built in Korea, the news agency said, noting that Ssangyong had been up for sale since creditors took control of the debt-ridden Korean automaker in 1999 when its parent Daewoo Group failed under a mountain of debt.

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