The Luxury Carmaker Announces Profit Warning Due to American Trade Pressures and Seeks Official Support
The automaker has blamed a profit warning to Donald Trump's tariffs, while simultaneously calling on the British authorities for more active assistance.
This manufacturer, producing its vehicles in Warwickshire and south Wales, revised its earnings forecast on Monday, representing the another revision this year. The firm expects deeper losses than the earlier estimated £110 million deficit.
Seeking Government Backing
The carmaker voiced concerns with the British leadership, telling investors that while it has communicated with representatives on both sides, it had positive discussions with the American government but required greater initiative from British officials.
It urged British authorities to protect 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.
Global Trade Impact
The US President has disrupted the worldwide markets with a tariff conflict this year, heavily impacting the car sector through the imposition of a 25% tariff on 3rd April, in addition to an previous 2.5 percent charge.
In May, American and British leaders agreed to a agreement to limit tariffs on 100,000 British-made vehicles per year to 10 percent. This tariff level took effect on 30th June, coinciding with the final day of Aston Martin's Q2.
Trade Deal Criticism
However, the manufacturer criticised the bilateral agreement, arguing that the implementation of a US tariff quota mechanism introduces further complexity and restricts the company's capacity to precisely predict financial performance for the current fiscal year-end and potentially quarterly from 2026 onwards.
Other Factors
Aston Martin also pointed to weaker demand partly due to increased potential for supply chain pressures, particularly after a recent cyber incident at a major UK automotive manufacturer.
UK automotive sector has been rattled this year by a digital breach on the country's largest automotive employer, which prompted a production freeze.
Market Reaction
Shares in Aston Martin, traded on the London Stock Exchange, fell by more than 11% as trading opened on Monday at the start of the week before partially rebounding to be down 7%.
The group sold 1,430 cars in its Q3, falling short of previous guidance of being broadly similar to the 1,641 cars sold in the equivalent quarter the previous year.
Upcoming Plans
Decline in demand comes as the manufacturer gears up to release its flagship hypercar, a mid-engine supercar costing approximately $1 million, which it expects will boost profits. Deliveries of the vehicle are expected to start in the final quarter of its financial year, although a projection of about 150 units in those three months was lower than earlier estimates, due to technical setbacks.
The brand, famous for its roles in the 007 movie series, has started a evaluation of its upcoming expenditure and investment strategy, which it said would probably result in reduced spending in engineering and development versus previous guidance of approximately £2 billion between its 2025 and 2029 financial years.
The company also informed investors that it no longer expects to generate profitable cash generation for the latter six months of its present fiscal year.
The government was approached for comment.