Car manufacturer Volvo struggled to increase profits at its Irish unit last year, in spite of a 26.6 per cent spike in revenues that brought its turnover to €58.94 million.

Accounts recently filed for Volvo Car Ireland Ltd, which imports the marque into the Republic, show that its pretax profit of €395,127 in 2004 improved by a mere €10,083 on the previous year.

Managing director David Baddeley said this was explained by the fact that the company incurred the cost last year of introducing two new models, which were not available for sale until this year. "The market is competitive. There's a huge amount of preparation for the arrival of a new car."

Mr Baddeley said sales this year were boosted by the addition of the S40 saloon and V50 estate models. "Sales have increased hugely. We're 50 per cent up in 2005 over 2004."

Society of the Irish Motor Industry figures for 2004 show that Volvo sold 20,150 cars and had a market share of 1.3 per cent, compared with 1,865 sales and market share of 1.28 per cent in 2003. "We're going to end the year with around 2,900 new registrations, just short of a 45 per cent increase," said Mr Baddeley of sales for 2005.

Volvo is ultimately owned by the Ford Motor Company in the US. It has a network of 13 dealers in the Republic, four of them in Dublin. The annual accounts say the company did not pay a dividend in 2004 but had retained profits of €5.47 million at the end of the year.

Some €54.37 million of its turnover was derived from car sales, while €4.56 million was derived from sales of car parts. Selling and distribution costs increased during the year to €1.68 million from €1.17 million.

The company paid €87,196 in corporation taxes to the Exchequer. Its 10 employees received €515,523 in wages and salaries. Its accounts show that advertising and promotion costs rose to €1.18 million from €990,056 in 2003, while dealer support and development costs rose to €415,267 from €209,030.

As the motor industry gears up for a boost in sales when the special savings schemes (SSIA) mature, Mr Baddeley said that dealers in the Volvo network had invested "huge sums" to develop their outlets. "The Volvo network in Ireland, I can say with certainty, gives the best representation of the brand than any of the other major European markets."