DESPITE A 62 per cent drop in new car sales last year, Ireland’s largest car distributor, Volkswagen (VW) Group Ireland, recorded an operating profit before tax of €399,000 for 2009, up from €246,000 in the previous year.
In comparison, accounts filed for the same period from General Motors Ireland – it controls the Opel brand – record a 25 per cent fall in operating profits before tax to €835,000 in 2009.
VW Group Ireland, which controls 22 per cent of the Irish new car market through its Volkswagen, Audi, Skoda, and Seat brands, had a turnover of €264 million, according to its accounts filed for the year ended December 31st, 2009.
That was down from €512 million in 2008, but despite this, and during one of the worst years in decades for the Irish motor trade, it still managed to increase its operating profits. That was due in part to a cut in operating costs from €511 million to €263 million for the year. Staff numbers remained the same as in 2008 at 116.
According to the directors’ report, the group started 2009 “with a considerable volume of disadvantaged cars as a consequence of the VRT change in 2008”, referring to the introduction of emissions-based taxation on new cars from July of that year. The firm held €109.4 million worth of vehicles at the end of 2008, but this was reduced to €56 million by the end of 2009.
VW Group Ireland is a wholly-owned subsidiary of the German car giant and has access to credit lines through VW Group Treasury. At the end of 2009 it owed fellow subsidiaries within the German firm €79.8 million.
It took control of the Volkswagen, Audi and Skoda brands here from Motor Distributors Ltd (MDL) on October 1st, 2008. MDL is a subsidiary of O’Flaherty Holdings. It then took over Seat distribution for Ireland from the OHM Group in November last year.
The accounts reveal the firm invested €910,000 in Audi Centre Ltd, which opened a flagship Audi dealership in the former Texaco House complex in Ballsbridge, Dublin, in February of this year. In August the business was sold to Belfast-based car retail group Charles Hurst.
Accounts for General Motors Ireland, meanwhile, show turnover for the year to December 31st, 2009, fell by 66 per cent to €68 million, with operating profits before tax down 25 per cent to €835,000. In a similar move to the VW Group, General Motors significantly reduced its new vehicle stock in Ireland, from €35 million to €11 million.
The company recorded a drop in parts sales of 40 per cent during last year and the directors’ report says it does not foresee a recovery in this area of the business in the short-term.
While a major restructuring of General Motors Europe is under way this year, the directors’ state it is not anticipated the Irish subsidiary will be significantly impacted.