Engineering firm GKN forecast another year of progress today as it continues to benefit from a recovery in global car production.

The Redditch-based company, which makes drive shafts for almost half of all new cars, increased annual profits by 17% to £578 million as sales rose 10% to £7.6 billion last year.

Global car production increased 4% to 84.8 million vehicles last year and should rise by another 3% this year, with increases in China, North America and Europe likely to be offset by a decline in Japan.

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GKN said Driveline and its Powder Metallurgy business, which makes around 80% of its sales from the car industry, are expected to continue to grow above the market.

The Driveline business grew profits by £11 million to £246 million last year, while Powder Metallurgy improved by £7 million to £94 million.

GKN, which has around 5,000 of its 48,000 strong workforce in the UK, added that increased production from Airbus and Boeing has given a boost to its aircraft components division.

GKN Aerospace's 2014 sales are expected to be slightly higher than the prior year, due to its presence on new commercial programmes and despite lower military sales.

The business makes fuselage, fan blades and cockpit windshields from sites including Yeovil, Luton, Derby, Portsmouth and the Isle of Wight.

GKN gave a major boost to its aerospace components division in 2012 when it completed a deal to acquire Volvo's aircraft business.

The operation makes the RM12 engine for Saab's Gripen fighter jets, used by the Swedish military, as well as supplying engine components to the three main engine manufacturers, including Rolls-Royce.

Chief executive Nigel Stein said today: "We expect the group's progress to continue in 2014."