The Luxury Carmaker Announces Profit Warning Due to American Trade Pressures and Seeks Official Support
Aston Martin has attributed a profit warning to US-imposed trade duties, as it calling on the UK government for greater active assistance.
This manufacturer, producing its cars in factories across England and Wales, lowered its earnings forecast on Monday, marking the another revision in the current year. It now anticipates deeper losses than the earlier estimated £110m deficit.
Seeking Government Support
Aston Martin expressed frustration with the UK government, informing shareholders that despite having communicated with officials from both the UK and US, it had positive discussions directly with the American government but required more proactive support from UK ministers.
The company called on UK officials to protect the interests of small-volume manufacturers such as itself, which create thousands of jobs and contribute to local economies and the broader UK automotive supply chain.
International Commerce Effects
Trump has shaken the worldwide markets with a trade war this year, significantly affecting the car sector through the imposition of a 25 percent duty on 3rd April, on top of an existing 2.5% levy.
During May, American and British leaders reached a deal to cap duties on one hundred thousand British-made vehicles annually to 10%. This rate took effect on 30th June, coinciding with the final day of the company's Q2.
Agreement Criticism
Nonetheless, Aston Martin criticised the trade deal, stating that the introduction of a US tariff quota mechanism introduces further complexity and limits the company's capacity to accurately forecast earnings for the current fiscal year-end and potentially each quarter starting in 2026.
Other Factors
Aston Martin also pointed to weaker demand partly due to greater likelihood for logistical challenges, especially following a recent cyber incident at a major UK automotive manufacturer.
UK automotive sector has been shaken this year by a digital breach on the country's largest automotive employer, which led to a production freeze.
Financial Response
Stock in Aston Martin, traded on the London Stock Exchange, fell by over 11 percent as markets opened on Monday at the start of the week before recovering some ground to stand down 7%.
Aston Martin sold one thousand four hundred thirty cars in its Q3, missing previous guidance of being roughly equal to the one thousand six hundred forty-one cars sold in the same period last year.
Future Plans
Decline in sales comes as the manufacturer prepares to launch its flagship hypercar, a rear-engine hypercar priced at approximately $1 million, which it hopes will boost earnings. Deliveries of the car are expected to begin in the final quarter of its fiscal year, though a projection of approximately one hundred fifty units in those three months was lower than earlier estimates, reflecting engineering delays.
The brand, famous for its roles in the 007 movie series, has initiated a review of its future cost and spending plans, which it indicated would likely result in reduced capital investment in engineering and development compared with previous guidance of approximately £2 billion between its 2025 to 2029 fiscal years.
Aston Martin also informed investors that it does not anticipate to generate positive free cash flow for the latter six months of its current year.
The government was contacted for a statement.
