The Luxury Carmaker Issues Profit Warning Amid US Tariff Pressures and Requests Official Assistance
The automaker has attributed an earnings downgrade to Donald Trump's trade duties, as it calling on the UK government for greater active assistance.
The company, producing its cars in Warwickshire and south Wales, revised its earnings forecast on Monday, marking the another revision in the current year. It now anticipates a larger loss than the previously projected £110 million shortfall.
Requesting Official Backing
The carmaker expressed frustration with the UK government, informing shareholders that despite having engaged with representatives from both the UK and US, it had productive talks directly with the American government but required more proactive support from British officials.
It urged British authorities to safeguard the needs of small-volume manufacturers like Aston Martin, which create thousands of jobs and add value to regional finances and the broader UK automotive supply chain.
International Commerce Effects
Trump has disrupted the worldwide markets with a trade war this year, heavily impacting the automotive industry through the imposition of a 25% tariff on April 3, in addition to an previous 2.5% levy.
In May, the US president and Keir Starmer agreed to a deal to cap tariffs on one hundred thousand UK-built vehicles annually to 10 percent. This tariff level took effect on June 30, coinciding with the last day of the company's Q2.
Agreement Concerns
Nonetheless, Aston Martin criticised the trade deal, arguing that the introduction of a American duty quota system introduces further complexity and limits the group's ability to accurately forecast financial performance for the current fiscal year-end and potentially each quarter starting in 2026.
Additional Challenges
The carmaker also cited reduced sales partly due to greater likelihood for supply chain pressures, particularly after a recent digital attack at a major UK automotive manufacturer.
The British car industry has been rattled this year by a cyber-attack on Jaguar Land Rover, which led to a manufacturing halt.
Financial Response
Stock in the company, traded on the London Stock Exchange, dropped by more than 11% as markets opened on Monday morning before recovering some ground to stand down 7%.
The group delivered one thousand four hundred thirty cars in its Q3, missing previous guidance of being broadly similar to the one thousand six hundred forty-one vehicles sold in the equivalent quarter the previous year.
Future Initiatives
The wobble in demand coincides with the manufacturer gears up to release its Valhalla, a mid-engine supercar costing approximately £743,000, which it hopes will boost earnings. Deliveries of the car are scheduled to start in the final quarter of its fiscal year, though a forecast of about 150 deliveries in those final quarter was below earlier estimates, due to engineering delays.
Aston Martin, famous for its roles in James Bond films, has started a evaluation of its future cost and spending plans, which it indicated would probably lead to lower capital investment in engineering and development compared with earlier forecasts of about £2bn between its 2025 to 2029 fiscal years.
The company also told investors that it no longer expects to achieve profitable cash generation for the latter six months of its present fiscal year.
UK authorities was contacted for a statement.