Rising sales of premium vehicles in Asia Pacific and emerging markets have helped drive a 10% rise in profit at multinational car dealer Inchcape.
Chief executive Andre Lacroix said that sales to people aspiring to a better lifestyle in those markets was offsetting weaker demand in the UK and Europe.
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He told Reuters: “You see a very strong performance at the top end of the market — not only in the car business but in every industry, luxury brands do extremely well. The ‘premiumisation’ of the economy is going to be a quantum change going forward in emerging markets.”
Lacroix said the global market for new vehicle sales is forecast to grow by a third between 2010 and 2015, with the total number of cars on the road growing 17% in the same period.
Around 65% of Inchcape’s profit comes from the fast-growing economies of Asia-Pacific and emerging markets, such as Russia and China. La Croix added that the company, which sells and distributes cars for manufacturers such as Toyota, Mercedes-Benz and BMW in 26 countries, was well positioned.
In the UK and Europe, its market position at the top end was proving more resilient than the mass market in straitened times.
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By GlobalDataInchcape posted better than expected profit before tax of GBP126.8m (US$207.2m) in the six months to 30 June, up from GBP115.2m in the same period last year, despite a 5.3% fall in turnover to GBP2.9bn, benefiting from an 8.6% reduction in costs.
Lacroix added that in some markets Inchcape continued to experience a temporary supply restriction on new cars as a result of the March earthquake in Japan.
“We believe the group will deliver a solid performance for 2011, in line with our expectations.”
