Good morning, everyone, and welcome to the China Automotive Systems third quarter 2023 conference call. At this time, all participants are in a listen-only mode, and the floor will be open for questions after the presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Mr. Kevin Theiss, Investor Relations. Kevin, over to you.
Thank you, everyone, for joining us today. Welcome to China Automotive Systems 2023 third quarter conference call. Joining us today are Mr. Jie Li, Chief Financial Officer of China Automotive Systems. He will be available to answer questions later in the conference call with the assistance of translation. Before we begin, I will remind all listeners that throughout this call, we may make statements that may contain forward-looking statements. Forward-looking statements represent the company's estimates and assumptions only as of the date of this call.
As a result, the company's actual results could differ materially from those contained in these forward-looking statements due to a number of factors, including those described under the heading Risk Factors in the company's Form 10-K Annual Report for the year ended December 31, 2022, as filed with the Securities and Exchange Commission, and in other documents filed by the company from time to time with the Securities and Exchange Commission. Any of these factors and other factors beyond our control could have an adverse effect on the overall business environment, cause uncertainties in the region where we conduct business, cause our business to suffer in ways that we cannot predict and materially impact our business, financial, condition and result of operations.
A prolonged disruption or any unforeseen delay in our operations of the manufacturing, delivery, or assembly process within our production facilities could continue to result in delays in the shipment of products to our customers, increased costs and reduced revenue. The company expressly disclaims any duty to provide updates to any forward-looking statements made in this call, whether as a result of new information, future events, or otherwise. On this call, I will provide a brief overview and summary of the third quarter and first nine months results for the period ending December 30, 2023. Management will then conduct a question and answer session. The 2023 third quarter and first nine months results are unaudited and reported using US GAAP accounting. For the purposes of our call today, I'll review the financial results in US dollars.
We'll first begin with a review of the recent dynamics of the Chinese economy, the automobile industry, and our market position. The Chinese economy continued to grow, but at a more subdued pace, as the GDP growth rate was 4.9% year-over-year in the third quarter of 2023, according to China's National Bureau of Statistics. Industrial production increased and retail sales stabilized in the 2023 third quarter. However, a two-year housing slump has continued and resulted in consumer spending more cautiously, affecting consumer price levels. Reduced demand for real estate has affected prices and eroded the financial condition of real estate developers and decreased building construction. Real estate development investment declined by 9.1% in the first nine months of 2023, year-over-year.
According to the Chinese Association of Automobile Manufacturers, CAAM, passenger automobile statistics in China for the third quarter of 2023 included a decline of 3.4% in July, an increase of 8.2% in August, and growth of 6.6% in September on a year-over-year basis. Passenger vehicle sales increased each month over the prior year during the 2023 third quarter. Commercial vehicle sales year-over-year during the third quarter of 2023 reflected an increase of 16.8% in July, followed by a 20% rise in August and a 33.2% increase in September. Electric vehicle sales and vehicle export sales also rose each month on a year-over-year basis in the 2023 third quarter.
Vehicle sales growth in the third quarter of 2023 partially reflected weak industry sales in the year ago period as China was coming out of COVID-19 restrictions. The central government, local government and auto dealers have provided financial subsidies, subsidies and incentives to help foster vehicle sales in China. Specific approaches include reducing automobile purchase taxes, boosting demand for electric vehicles by improving and expanding EV infrastructure, more consumer-friendly banking policies and regulations, and promoting tourism. Our 2023 third quarter revenue growth increased slightly year-over-year to $137.5 million. Net sales of traditional steering products and parts at $91.8 million were consistent with net sales in last year's third quarter.
Net sales of EPS systems grew by 2% to $45.7 million and increased as a percentage of sales to 33.2% for the three months ended September 30, 2023. Domestic passenger car sales were slightly higher, while sales to the domestic commercial vehicle market declined by 8.2%. Net product sales of other entities rose by 23.9%, primarily due to higher sales by Wuhan Jielong, our producer of steering columns. Internationally, our sales in Brazil continued its growth trend, rising by 15.7% to $13.3 million in the 2023 third quarter, mainly due to higher sales to Fiat. Sales into North America declined by 6.4% to $27.6 million.
The lower sales was primarily due to less volume shipped to Ford Motor in the third quarter. The volatility of the US dollar to the RMB also had affected the reported revenue in the third quarter of 2023. With China, the world's largest vehicle exporter, our customers are benefiting and exports are becoming a more important growth opportunity. While overall net sales increased slightly, our gross margin grew by 18.7% year-over-year. I'm sorry. Our gross profit grew by 18.7% year-over-year, and our gross margin increased to 18% in the third quarter of 2023, from 15.2% in the same quarter in 2022.
Our efficient cost controls led to an approximate 8.2% year-over-year decline in total operating expenses, which helped propel an increase of 108.2% year-over-year in income from operations in the third quarter of 2023. Diluted income per share rose to $0.31, compared with $0.24 in the year ago third quarter. For the first nine months ended September 30, 2023, net sales increased by 4.1% year-over-year, with gross margin increasing to 16.6% from 14.6% a year ago. Diluted income per share increased to $0.89, up from $0.55 in the first nine months of 2022.
We continue to supply a large number of vehicle OEMs in China, including BYD, the largest electric vehicle producer in China, Dongfeng Auto Group Limited, Beiqi Foton Motors and internationally, including Jeep, Ram, Fiat and Alfa Romeo in different worldwide markets, and Ford Motor Company in North America. In addition to being a supplier of advanced steering products, our research and development programs are aligned with specific projects of our OEM customers. Collaboration with our OEM customers broadens our technology base for future use. To enhance our own proprietary advanced driver assistance systems, ADAS, we are incorporating our Sentient AB subsidiary's automotive technology, including software development and hardware design for advanced steering functions, combined with their vehicle motion controls to increase our autonomous driving program. With our growing technology capability, new models of steering are under development to expand our market presence.
At September 30, our cash and cash equivalents and pledged cash were $135.1 million, approximately 4.47 per share. In addition, as of September 30, 2023, inventory levels were $9 million lower, and short-term loans declined by 7.1% compared to the end of 2022. Total current assets were $509 million, compared with total liabilities of $358.8 million at September 30, 2023, further highlighting our financial strength. Now, let me review the financial results in the third quarter of 2023. In the third quarter of 2023, our net sales increased slightly to $137.5 million, compared to $137.2 million in the same quarter of 2022.
The increase in net product sales was due to an increase of EPS net product sales and steering columns compared to the third quarter of 2022. EPS net sales were $45.7 million, or 33.2% of net sales, compared to $44.8 million, or 32.6% of net sales in the third quarter of 2022. Excuse me. Net product sales in North America was $27.6 million, compared to $29.5 million in the third quarter of 2022, primarily due to lower product sales. Net product sales in Brazil rose by 15.7% to $13.3 million due to higher demand.
Gross profit increased by 18.7% to $24.8 million in the third quarter of 2023, compared to $20.9 million in the third quarter of 2022. Gross margin was 18%, compared to 15.2% for the same period of 2022, mainly due to a change in product mix and a decrease in unit cost. Selling expenses declined by 5% to $3.8 million from $4 million in the third quarter of 2022. Selling expenses represented 2.8% of net sales in the third quarter of 2023, compared to 2.9% in the third quarter of 2022. General and administrative expenses, G&A, increased by 24.5% to $6.1 million in the third quarter of 2023-...
compared to $4.9 million in the same quarter of 2022. The increase was primarily due to higher marketing and office expenses, a one-time expense for the company's thirtieth anniversary celebrations, and the impact of the appreciation of the US dollar against the RMB. G&A expenses represented 4.4% of net sales in the third quarter of 2023, compared to 3.6% of net sales in the third quarter of 2022. Research and development expenses, R&D, decreased by 27.4% to $6.9 million in the third quarter of 2023, compared to $9.5 million in the third quarter of 2022.
R&D expenses represented 5% of net sales in the third quarter of 2023, compared to 6.9% of net sales in the third quarter of 2022. These expenses were primarily due to higher R&D expenses in the third quarter of 2022 for the development of I-RCB, E-RCB, and REPS new products. Income from operations increased by 108.2% year-over-year to $10.2 million, compared to $4.9 million in the third quarter of 2022. Higher income from operations was mainly due to increased gross profit and an 8.2% year-over-year reduction in operating expenses in the third quarter of 2023. Excuse me.
Other income was $1.2 million in the third quarter of 2023, compared to $0.7 million in the third quarter of 2022, primarily due to more government subsidies received in the third quarter of 2023. Net financial income was $0.2 million in the third quarter of 2023, compared to net financial income of $4.8 million in the third quarter of 2022, mainly due to a decrease in the foreign exchange gain due to foreign exchange volatility. Income before income taxes and equity and earnings of affiliated companies increased by 12% to $11.2 million in the third quarter of 2023, compared to income before income tax expenses and equity in earnings of affiliated companies of $10 million in the third quarter of 2022.
The higher income before income tax expenses and equity and earnings of affiliated company was mainly due to increased income from operations compared to the third quarter of 2022. Income tax expense was $0.7 million in the third quarter of 2023, compared to an income tax expense of $0.9 million for the third quarter of 2022, which was mainly due to a valuation allowance recognized in the third quarter of 2022. Net income attributable to parent company's common shareholders was $9.5 million in the third quarter of 2023, compared to net income attributable to parent company's common shareholders of $7.5 million in the third quarter of 2022.
Diluted income per share increased by 29.2% to $0.31 in the third quarter of 2023, compared to diluted net income per share of $0.24 in the third quarter of 2022. Weighted average number of diluted common shares outstanding was 30,189,363 shares in the third quarter of 2023, compared to 30,640,260 in the third quarter of 2022. First nine months of 2023. Net sales for the first nine months of 2023 increased by $4.1 million, I'm sorry, by 4.1% to $417.2 million, compared to $400.8 million in the first nine months of 2022.
Gross profit for the first nine months of 2023 increased by 18.3% to $69.1 million, compared to $58.4 million in the corresponding period last year. Gross margin for the first nine months of 2023 was 16.6%, compared to 14.6% for the corresponding period in 2022. For the nine months ending September 30, 2023, gain on other sales amounted to $3.6 million, compared to $5.3 million for the corresponding period in 2022. Income from operations increased 144.8% to $25.7 million, compared to income from operations of $10.5 million in the first nine months of 2022.
Net income attributable to parent company's common shareholders was $26.8 million, compared to net income attributable to parent company's common shareholders of $16.8 million in the corresponding period last year. Diluted income per share was $0.89 in the first 9 months of 2023, compared to diluted income per share of $0.55 for the corresponding period in 2022. Balance sheet items. As of September 30, 2023, total cash, cash equivalents and pledged cash deposits were $135.1 million. Total accounts receivable, including notes receivable, were $241.5 million. Accounts payable, including notes payable, were $222.1 million.
Total parent company stockholders' equity was $328.6 million as of September 30, 2023, compared to $311.7 million as of December 31, 2022. Net cash provided by operating activities was $10.7 million in the first nine months of 2023, compared to net cash provided by operating activities of $31.7 million in the first nine months of 2022. Payments to acquire property, plant, and equipment were $12.2 million, compared to $11.8 million in the first nine months of 2022. Management has reiterated its revenue guidance for the full year 2023 to $560 million. This target is based on the company's current views on operating and market conditions, which are subject to change.
With that, operator, we are ready to begin the Q&A session.
Thank you very much, Kevin. At this time, we will be conducting our question-and-answer session. If you would like to ask a question, please press star one on your phone keypad now. A confirmation tone will indicate that your line is in the question queue. You may press star two if you would like to remove your question from the queue. For anyone using speaker equipment, it may be necessary to pick up your handset before you press the keys. One moment while we poll for any questions. Just as a reminder, if you have any questions, please press star one on your phone keypad. Once again, if you have any questions from the audience, please press star one on your phone keypad now. Okay, I'm not seeing any questions come into the queue, but I can certainly let you know if I see somebody.
So in that case, I can hand back over to Kevin for any closing remarks.
We thank you for your participation in today's conference call. Be safe, and we look forward to speaking with you in the future.
Thank you very much. This does conclude today's conference call. You may disconnect your phone lines at this time, and have a wonderful day. Thank you for your participation.