PROFITS AT the Republic’s Opel cars distributor were flat last year but its figures show that sales fell sharply. General Motors Ireland’s latest accounts show that operating profits at the Irish auto distributor remained level last year at €1.4 million.

General Motors Ireland’s sales were down more than 20 per cent in 2008 to €198.6 million from €275.9 million the previous year. The figures show that the group cut the cost of sales in line with this.

The overall car market here shrank by 22.2 per cent last year, while the passenger market fell 18.6 per cent, to 151,000 units in 2008 from 186,000 in 2007.

A €580,000 interest repayment on bank loans dented 2008 profits before tax, which were €1.12 million, compared with €1.93 million the previous year.

Rent and interest income of €531,000 lifted the company’s 2007 pretax profits, while it recorded no interest payments that year. Its earnings from rent and interest came to €290,000 in 2008.

The directors’ report states that the company maintained its market share of 7.8 per cent in 2008, but says that the market itself was down considerably on the previous year.

The overall group is expected to launch a number of new models here and in Europe next year.

The launch in April of the Opel Insignia boosted the group’s position in the large car market.

As part of the group’s overall restructuring, General Motors Ireland has transferred its shares to a trust as a first step towards the transfer of the Opel distributor’s business to the European group’s new owners. A 55 per cent stake in German car manufacturer Opel, General Motors’ (GM) European arm is set to be sold to Canadian operator, Magna. GM will keep 35 per cent and 10 per cent will go to European workers. General Motors’ Irish subsidiary is part of the European business that is to be transferred. The company distributes Opel cars, vans and commercial vehicles in the Republic.

Directors Dave Sheeran and Allan Dunlop say in their report,filed with the accounts, that General Motors Corporation transferred all the shares in the Irish company to an independent trust in June.

“It is intended that a majority shareholding will be transferred to from the trust to Magna International Inc during 2009 as part of a deal to buy all the operations of General Motors Europe,” the report states. It adds that a restructuring of the European business is now under way.