The Luxury Carmaker Issues Earnings Alert Due to US Tariff Pressures and Requests Official Assistance
The automaker has blamed an earnings downgrade to US-imposed trade duties, while simultaneously urging the British authorities for more proactive support.
The company, producing its cars in Warwickshire and south Wales, revised its earnings forecast on Monday, marking the second such downgrade in the current year. The firm expects deeper losses than the previously projected £110m shortfall.
Requesting Official Support
The carmaker voiced concerns with the UK government, informing investors that despite having engaged with officials on both sides, it had productive talks directly with the US administration but required greater initiative from UK ministers.
The company called on UK officials to protect the interests of niche automakers like Aston Martin, which create thousands of jobs and add value to local economies and the wider British car industry network.
International Commerce Impact
The US President has shaken the worldwide markets with a trade war this year, significantly affecting the automotive industry through the imposition of a 25 percent duty on 3rd April, on top of an existing 2.5 percent charge.
In May, the US president and Keir Starmer reached a agreement to limit tariffs on 100,000 UK-built vehicles per year to 10 percent. This tariff level came into force on June 30, coinciding with the final day of the company's second financial quarter.
Trade Deal Criticism
Nonetheless, Aston Martin expressed reservations about the trade deal, arguing that the introduction of a US tariff quota mechanism introduces additional complications and restricts the company's ability to accurately forecast earnings for the current fiscal year-end and potentially each quarter starting in 2026.
Other Factors
Aston Martin also pointed to reduced sales partly due to greater likelihood for logistical challenges, particularly following a recent digital attack at a leading British car producer.
UK automotive sector has been rattled this year by a digital breach on Jaguar Land Rover, which prompted a manufacturing halt.
Market Response
Stock in the company, listed on the London Stock Exchange, dropped by more than 11% as trading opened on Monday at the start of the week before recovering some ground to be down 7%.
Aston Martin delivered one thousand four hundred thirty vehicles in its third quarter, missing previous guidance of being roughly equal to the one thousand six hundred forty-one vehicles delivered in the equivalent quarter last year.
Upcoming Plans
The wobble in demand comes as Aston Martin prepares to launch its Valhalla, a rear-engine hypercar priced at around $1 million, which it hopes will increase earnings. Shipments of the car are expected to start in the final quarter of its fiscal year, although a forecast of approximately one hundred fifty deliveries in those three months was below earlier estimates, reflecting technical setbacks.
Aston Martin, famous for its roles in James Bond films, has initiated a evaluation of its future cost and spending plans, which it said would likely result in reduced spending in R&D compared with previous guidance of about £2bn between its 2025 and 2029 financial years.
The company also informed investors that it no longer expects to achieve profitable cash generation for the second half of its present fiscal year.
UK authorities was approached for comment.