Aston Martin in Profit Warning Amid US Tariff Woes
Luxury carmaker Aston Martin Lagonda has issued a profit warning, citing the impact of US tariffs and supply chain pressures from Jaguar Land Rover's cyber-attack fallout. The company now expects underlying losses to be greater than £110 million, a significant downgrade from its previous forecast.
This is the second downward revision to Aston Martin's outlook since early July, sending shares tumbling by as much as 11% during trading on Monday. The firm's wholesale volumes are expected to drop by a mid-high single-digit percentage due to "heightened challenges in the global macroeconomic environment, including the ongoing impact of tariffs" with weaker performances seen across North America and Asia.
Aston Martin's warning is the latest blow to the luxury car sector, which has been grappling with declining sales and increasing competition from electric vehicle manufacturers. The company's woes are compounded by the uncertainty surrounding Brexit, which has led to a decline in consumer confidence and a weakening of the pound.
The firm's announcement comes as Jaguar Land Rover, one of Aston Martin's key suppliers, is still reeling from a cyber-attack that has disrupted its operations. The attack has resulted in supply chain delays and increased costs for Jaguar Land Rover, which may have a ripple effect on Aston Martin's production plans.
Aston Martin's management team has launched an immediate review of costs and spending to mitigate the impact of these challenges. However, investors remain concerned about the company's ability to recover from its current woes. "The global macroeconomic environment facing the industry remains challenging," said a spokesperson for Aston Martin. "We are taking steps to address these challenges, but we expect further losses in the short term."
Aston Martin's warning has sent shockwaves through the luxury car sector, with analysts predicting a decline in sales and profits for other premium brands. The company's woes also raise concerns about its ability to meet its ambitious production targets, including the launch of its new Valhalla model.
As Aston Martin navigates these challenging times, it will be closely watched by investors and industry observers alike. The company's ability to adapt to changing market conditions and mitigate the impact of tariffs and supply chain pressures will be crucial in determining its future prospects.
Key statistics:
Underlying losses expected: greater than £110 million
Wholesale volumes drop: mid-high single-digit percentage
Share price decline: up to 11%
Global macroeconomic challenges: heightened uncertainty, including US tariffs and Brexit
Market context:
The luxury car sector has been facing declining sales and increasing competition from electric vehicle manufacturers. The impact of US tariffs and Brexit on consumer confidence and supply chains has further exacerbated the challenges faced by premium brands.
Stakeholder perspectives:
Investors: concerned about Aston Martin's ability to recover from its current woes
Suppliers: Jaguar Land Rover's cyber-attack fallout may have a ripple effect on Aston Martin's production plans
Consumers: uncertainty surrounding Brexit and tariffs may lead to decreased demand for luxury cars
Future outlook:
Aston Martin will need to take decisive action to mitigate the impact of these challenges. The company's ability to adapt to changing market conditions and maintain its premium brand image will be crucial in determining its future prospects.
Next steps:
Immediate review of costs and spending
Launch of new Valhalla model
Continued monitoring of global macroeconomic environment
*Financial data compiled from Bbc reporting.*
