🔗 Share this article

Aston Martin has blamed an earnings downgrade to US-imposed trade duties, while simultaneously calling on the British authorities for greater proactive support.

This manufacturer, which builds its cars in Warwickshire and south Wales, lowered its profit outlook on Monday, marking the another revision in the current year. It now anticipates a larger loss than the earlier estimated £110 million shortfall.

Seeking Government Support

Aston Martin voiced concerns with the British leadership, telling investors that while it has engaged with representatives from both the UK and US, it had productive talks directly with the US administration but needed more proactive support from British officials.

It urged British authorities to safeguard the needs of small-volume manufacturers such as itself, which provide thousands of jobs and add value to regional finances and the wider British car industry network.

International Commerce Effects

The US President has shaken the worldwide markets with a trade war this year, heavily impacting the car sector through the imposition of a 25 percent duty on 3rd April, on top of an existing 2.5 percent charge.

In May, American and British leaders reached a deal to limit tariffs on 100,000 British-made cars per year to 10 percent. This rate came into force on June 30, coinciding with the last day of Aston Martin's second financial quarter.

Trade Deal Concerns

However, Aston Martin criticised the trade deal, arguing that the introduction of a US tariff quota mechanism adds further complexity and restricts the group's ability to precisely predict earnings for this financial year end and potentially quarterly from 2026 onwards.

Additional Challenges

Aston Martin also pointed to reduced sales partially because of increased potential for logistical challenges, especially after a recent cyber incident at a leading British car producer.

The British car industry has been rattled this year by a cyber-attack on the country's largest automotive employer, which prompted a production freeze.

Financial Reaction

Stock in the company, listed on the London Stock Exchange, fell by more than 11% as trading opened on Monday morning before recovering some ground to be 7 percent lower.

The group delivered one thousand four hundred thirty vehicles in its Q3, falling short of earlier projections of being roughly equal to the 1,641 vehicles delivered in the same period last year.

Future Initiatives

Decline in sales coincides with the manufacturer gears up to release its Valhalla, a rear-engine hypercar costing around $1 million, which it hopes will increase profits. Shipments of the car are expected to start in the last quarter of its financial year, though a projection of approximately one hundred fifty deliveries in those final quarter was lower than previous expectations, due to engineering delays.

The brand, famous for its appearances in James Bond films, has initiated a review of its upcoming expenditure and spending plans, which it indicated would likely result in lower spending in R&D compared with earlier forecasts of about £2bn between its 2025 to 2029 financial years.

Aston Martin also informed shareholders that it does not anticipate to generate profitable cash generation for the latter six months of its present fiscal year.

UK authorities was approached for a statement.