Aston Martin Issues Earnings Alert Amid US Tariff Pressures and Requests Official Support
The automaker has attributed a profit warning to Donald Trump's trade duties, as it urging the UK government for more proactive support.
The company, producing its vehicles in Warwickshire and south Wales, revised its profit outlook on Monday, marking the second such downgrade this year. The firm expects a larger loss than the previously projected £110m shortfall.
Requesting Official Support
The carmaker expressed frustration with the UK government, informing investors that despite having communicated with officials on both sides, it had productive talks with the American government but required more proactive support from UK ministers.
It urged UK officials to safeguard the interests of small-volume manufacturers like Aston Martin, which provide thousands of jobs and contribute to local economies and the wider British car industry network.
International Commerce Effects
The US President has shaken the global economy with a tariff conflict this year, significantly affecting the automotive industry through the introduction of a 25 percent duty on April 3, on top of an existing 2.5% levy.
During May, the US president and Keir Starmer agreed to a agreement to cap duties on one hundred thousand British-made cars per year to 10%. This rate took effect on 30th June, aligning with the last day of the company's second financial quarter.
Trade Deal Concerns
However, the manufacturer criticised the bilateral agreement, arguing that the introduction of a American duty quota system introduces additional complications and limits the group's capacity to precisely predict financial performance for this financial year end and potentially each quarter starting in 2026.
Other Challenges
The carmaker also pointed to reduced sales partially because of increased potential for supply chain pressures, especially following a recent cyber incident at a leading British car producer.
UK automotive sector has been rattled this year by a cyber-attack on the country's largest automotive employer, which led to a production freeze.
Market Reaction
Shares in the company, traded on the LSE, fell by over 11 percent as trading opened on Monday morning before recovering some ground to be down 7%.
Aston Martin delivered one thousand four hundred thirty cars in its Q3, falling short of earlier projections of being roughly equal to the one thousand six hundred forty-one cars sold in the same period the previous year.
Upcoming Initiatives
Decline in sales coincides with Aston Martin gears up to release its flagship hypercar, a rear-engine hypercar priced at approximately $1 million, which it expects will boost profits. Deliveries of the vehicle are expected to begin in the final quarter of its financial year, though a forecast of about 150 deliveries in those final quarter was lower than earlier estimates, reflecting technical setbacks.
Aston Martin, famous for its appearances in James Bond films, has started a review of its future cost and spending plans, which it indicated would probably lead to reduced capital investment in engineering and development versus earlier forecasts of about £2bn between its 2025 and 2029 fiscal years.
The company also informed investors that it does not anticipate to achieve positive free cash flow for the latter six months of its current year.
The government was approached for a statement.