Vauxhall profits collapse to pounds 3m
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Your support makes all the difference.The gloom in Britain's car industry deepened with a collapse in profits at Vauxhall, the UK company owned by General Motors of the US. Vauxhall blamed a stagnant UK market caused by lack of consumer confidence as well as industrial action by employees for a slump in profits to pounds 3m last year from pounds 79m in 1994.
The company also blamed the weakness of the pound against other European currencies and the costs associated with a big factory up-grade at Luton. One industry source who would not be named said Vauxhall's performance was further affected by disappointing sales of the new Vectra, the replacement for the Cavalier, in the face of fierce competition for the all-important fleet buyer. The situation is set to be exacerbated with the forthcoming launch by Peugeot of a replacement for its 405 model, he said.
Vauxhall's chairman, Charles Golden, said: "Our 1995 profit was disappointing, but we knew it would be a difficult year, with our financial performance adversely affected by some exceptional costs. We are looking to improve our results in 1996."
"The reluctance of UK private buyers to take the plunge and buy a new car highlighted the persistent lack of confidence which has had a numbing effect on the retail car market," he added.
Expressing disappointment that the year's performance was worsened by industrial action over pay in December, Mr Golden said: "As an industry, we are far from out of the woods in terms of global competitiveness." But he added: "Now that our three-year pay agreement has been accepted by the workforce we have to concentrate on further cost reduction to improve Vauxhall's results."
Vauxhall's total wholesale sales of cars and light commercial vans was down by 1.5 per cent at 420,727 units in 1995. Sales of cars in the UK fell by 5.3 per cent to 294,859, while total production was down by 7.3 per cent at 242,859, partly because of the change from the Cavalier to the Vectra. But exports from the factories at Luton and Ellesmere Port plants rose by 10.5 per cent to 103,300 units.
Vauxhall said the performance occurred in a difficult car sector which has seen growth of only 1.8 per cent during 1995 and a 2.5 per cent fall in retail sales.
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