British parts maker GKN has reported a first-half profit rise of one third driven by strong growth at its automotive business on the back of strong luxury car sales.
The group’s driveline unit, which makes driveshafts, chassis and axles, reported a 29% rise in profit in the six months to the end of June.
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GKN’s biggest automotive customers include Audi, BMW and Volkswagen and sales have been boosted by the contribution of Getrag Driveline Products, which it bought last year.
Chief executive Nigel Stein 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.”
Luxury car makers have benefited from strong sales growth in China where demand for premium vehicles has continued to grow despite fears over slowing economic growth.
Stein added: “In China the market is up about 6% but premium has done much better than that.”
GKN reported that global light vehicle production rose by around 9% although it expects this to fall slightly in the second half. Pre-tax profit rose 33% to GBP266m (US$417m) in the six months to the end of June, while revenues rose 16% to GBP3.4bn ($5.4bn).
