The Luxury Carmaker Releases Profit Warning Due to US Tariff Challenges and Seeks Government Assistance
The automaker has blamed a profit warning to Donald Trump's trade duties, as it calling on the UK government for greater proactive support.
The company, producing its vehicles in Warwickshire and south Wales, revised its earnings forecast on Monday, representing the second such revision this year. It now anticipates deeper losses than the previously projected £110 million deficit.
Seeking Government Support
Aston Martin voiced concerns with the British leadership, telling investors that despite having engaged with representatives from both the UK and US, it had positive discussions with the US administration but needed more proactive support from British officials.
It urged UK officials to protect the needs of small-volume manufacturers such as itself, which create numerous employment opportunities and add value to local economies and the wider British car industry network.
International Commerce Effects
The US President has shaken the worldwide markets with a tariff conflict this year, significantly affecting the car sector through the imposition of a 25 percent duty on April 3, in addition to an previous 2.5% levy.
During May, American and British leaders agreed to a agreement to cap duties on one hundred thousand UK-built vehicles per year to 10 percent. This tariff level took effect on 30th June, aligning with the last day of the company's second financial quarter.
Trade Deal Concerns
Nonetheless, Aston Martin criticised the bilateral agreement, stating that the implementation of a US tariff quota mechanism introduces additional complications and limits the company's capacity to precisely predict financial performance for this financial year end and possibly quarterly from 2026 onwards.
Additional Challenges
The carmaker also cited reduced sales partially because of greater likelihood for supply chain pressures, particularly after a recent cyber incident at a leading British car producer.
UK automotive sector has been shaken this year by a cyber-attack on Jaguar Land Rover, which led to a manufacturing halt.
Financial Reaction
Shares in the company, listed on the LSE, fell by more than 11% as markets opened on Monday morning before partially rebounding to stand 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 vehicles sold in the equivalent quarter last year.
Upcoming Initiatives
The wobble in sales coincides with the manufacturer gears up to release its Valhalla, a rear-engine supercar priced at around £743,000, which it expects will boost profits. Deliveries of the vehicle are scheduled to start in the final quarter of its financial year, though a projection of approximately one hundred fifty units in those final quarter was below earlier estimates, reflecting engineering delays.
The brand, famous for its appearances in James Bond films, has initiated a evaluation of its future cost and investment strategy, which it said would likely result in lower spending in engineering and development compared with earlier forecasts of about £2bn between its 2025 and 2029 fiscal years.
The company also informed shareholders that it does not anticipate to achieve positive free cash flow for the second half of its current year.
UK authorities was contacted for comment.