Booming premium car sales help drive GKN to 33% profit rise
Engineering firm GKN gains from Audi sales as it plans aerospace expansion on back of Volvo purchase
Demand for premium cars around the world has contributed to a 33% increase in profits at one of Britain’s strongest, but less celebrated, manufacturers.
GKN is a FTSE 100 maker of driveshafts that help steer cars and wing components for aeroplanes, giving it an important if lower-key profile role in two of the more glamorous manufacturing industries.
GKN said first-half pre-tax profits grew by a third to £266m, with its automotive business posting a 25% increase in sales. GKN’s biggest automotive customer is Volkswagen, owner of the Audi brand. The company is also set to become a bigger player in the aircraft engine component market after acquiring Volvo’s aerospace business for $990m (£630m).
GKN’s chief executive, Nigel Stein, said high-end cars were selling well, benefitting the company. He said: “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.” Stein added that the company’s two main sectors – aerospace and automotive – will be key players in boosting manufacturing exports, with the government recently announcing extra support for aviation through a centre of excellence for aerodynamics. “The UK has begun to realise that these two sectors are winners and it is feeling confident enough to back them,” he said.