UPDATE 1-Tofas' net jumps eight-fold to 126.6 mln lira

* Q3 profit up eight-fold at 126.6 mln Turkish lira

* Sales rise 18 percent to 1.299 bln lira

(Adds analysts' comments, more details, background)

ISTANBUL, Oct 26 (Reuters) - Tofas (TOASO.IS), a joint
venture between Italian carmaker Fiat FIAT.MI and Turkish
group Koc (KCHOL.IS), reported an eight-fold rise in its third
quarter net income on Monday after tax incentives boosted sales.

Profit was 126.6 million lira ($85 million) in the
July-to-September period, compared with 14.5 million lira in the
same period a year ago, according to a stock-exchange filing.

Sales climbed 18 percent to 1.299 billion lira, it said.

"This high profit is due to revenue and the operating
profit, which was higher than expected," said Aysegul Ozgur, an
analyst at Fortis Investment in Istanbul.

The Turkish government slashed taxes on cars, as well as
white goods, computers and other goods, to encourage consumers
to spend more as the country slipped into a record economic
contraction earlier this year.

The government ended the tax incentives on Sept 30.

"The rise in sales is due almost entirely to the
government's tax cuts," said Cemal Demirtas, an analyst at Oyak
Securities in Istanbul. "There was also a slight increase in
exports."

Operating profit was 131 million lira, for a margin of 10.1
percent, Demirtas said.

The auto industry is Turkey's top exporter and one of its
biggest industrial sectors. The global economic slowdown has
sapped demand for automobiles and other goods in Europe,
Turkey's main export market.

Tofas's shares rose 0.94 percent to 4.30 lira before the
results, which were released after the stock market closed.
($1=1.48 lira)
(Reporting by Ayla Jean Yackley)