Vauxhall lifts profits 75% as exports accelerate

Vauxhall, the UK subsidiary of General Motors, yesterday reported a 75 per cent increase in profits for 1999 despite severe price pressures in the new car market and the strength of sterling.

Vauxhall, the UK subsidiary of General Motors, yesterday reported a 75 per cent increase in profits for 1999 despite severe price pressures in the new car market and the strength of sterling.

Pre-tax profits rose to £127.7m compared with £72.6m the year before. Vauxhall's sales of cars and light commercial vehicles also rose from 302,000 in 1998 to 322,000 last year, while production at its Luton and Ellesmere Port plants grew by 21 per cent to 315,205.

The results are likely to be seized on by the anti-euro lobby as proof that Britain's absence from the single currency is not damaging UK manufacturers. Unlike Nissan, which is considering switching production of the Micra from Sunderland to France because of the strong pound, Vauxhall has recently announced a £189m expansion of its UK production facilities.

Vauxhall's profits were flattered by a £40m write-back of restructuring provisions made in previous years. But even before this one-off benefit, underlying profits were up by 20 per cent at just under £88m. The jump in profits coincided with a big increase in exports from Luton and Ellesmere Port. Exports of cars and vans rose by a third to nearly 185,000 - 60 per cent of total production.

Nick Reilly, Vauxhall's chairman, said 1999 had been a reasonable year despite difficult trading conditions. He attributed the rise in profitability to improved efficiency and cost savings in manufacturing, after-sales and head-office functions as well as the one-off adjustment. However, he cautioned: "Some of these savings cannot be repeated. The company must continue to examine every area of our operation to remain competitive."