GKN, the British car and plane parts manufacturer, saw an increased profit by a third, due to strong sales of luxury car sales.
From January to June the company reported an increase of 29% in profit. GKN also manufactures axles, chassis and driveshafts, and includes among its customers auto makers such as Volkswagen, BMW and Audi. The company’s sales have been boosted by Getrag Driveline Products, purchased in 2011, which increased luxury car sales.
“The premium end of the market is the area that is doing better, especially in China and Europe, though in south Europe small cars are still not doing so well,” GKN’s chief executive Nigel Stein told reporters.
From January to June European sales fell 7%, with Seat, Renault, Fiat, Opel and Vauxhall all seeing a decrease of 15%. But Jaguar Land Rover’s sales saw a boost in China, where demand for premium vehicles continued to grow. GKN’s light vehicle production increased 9%, but it expects to slightly decrease in the second half.
“We sense that sentiment towards GKN is still being heavily swayed by caution about global light vehicle production, but GKN is likely to be able to generate at worst a robust performance in the second half of 2012 and 2013,” said Jefferies analyst Sandy Morris.