* Q3 EBIT 428 mln eur vs 314 mln year-ago
* Q3 sales 3.03 bln eur vs 2.81 bln
* Backs 12-13 pct FY EBIT margin range, 7 pct sales target (Adds CEO comment, detail from earnings release and background)
BERLIN, Nov 20 (Reuters) - Indebted German engineering group Schaeffler said operating profit rose 36 percent in the third quarter, thanks to recovering car demand in Europe and growth in China which helped it confirm earnings forecasts for the year.
The group, which produces components and systems for automotive and industrial applications, generates about three-quarters of sales from automotive business.
Car demand in Europe, where Schaeffler earns about 60 percent of its revenue, has grown for 14 straight months after a six-year slump, though it remains vulnerable to stagnant or slowing growth in the region's major economies.
Schaeffler on Thursday said earnings before interest and tax (EBIT) increased to 428 million euros ($536.7 million) from 314 million euros in the year-earlier period. Quarterly sales rose 7.9 percent to 3.03 billion euros from 2.81 billion.
"Despite the challenging environment, we again managed to continue along our growth path while also improving the quality of our earnings," chief executive Klaus Rosenfeld said.
Schaeffler, the biggest shareholder in German auto parts and tyre maker Continental, confirmed its forecasts for an operating EBIT margin of between 12 and 13 percent for the full year and sales growth in excess of 7 percent, adjusted for currency swings.
The family-owned company has lowered net debt to 5.77 billion euros at the end of September from over 10 billion during the 2008-9 financial crunch when Schaeffler's hostile bid for Continental backfired.
$1 = 0.7974 euro Reporting by Andreas Cremer; Editing by Maria Sheahan and Clara Ferreira Marques