The world's largest car maker, General Motors, has reported a big increase in net profits as its aggressive discounting policy in its home US market continues to pay off.

The company's trucks division turned in the strongest performance, helping to nudge GM closer to a 30% share of the total US vehicles market.

GM also stemmed losses at its overseas operations, including the unprofitable Saab brand.

The Swedish car maker lost $129m compared with a loss of $240m in the same period last year.

High cost

Overall, GM fourth quarter net profits, including some one-off charges, rose to $1.02bn or $1.71 per share, compared with $255m this time last year.

The results were in line with Wall Street expectations and had little effect on its share price.

The profit boost came despite the high cost of its US consumer incentives.

Discounts averaged more than $3,300 per vehicle in December, up from about $1,870 in December 2001, according to market research firm Autodata.

Gloomy predictions

GM has also continued to drive down costs, and now claims to have the lowest structural cost per car of the big three US auto makers.

The company's share of the US market rose to 29.2% from 28.9% in the same quarter last year.

It increased North America vehicle production by 10% to 1.425 million cars and trucks in the fourth quarter, including a 14% rise in trucks alone.

But analysts expect GM's North American profits to drop in 2003, with pension costs mounting and forecasts for falling US sales this year.

There is also expected to be continued downward pressure on prices.