🔗 Share this article

Aston Martin has attributed 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 factories across England and Wales, lowered its profit outlook on Monday, representing the second such downgrade in the current year. The firm expects deeper losses than the earlier estimated £110m shortfall.

Requesting Official Backing

The carmaker voiced concerns with the British leadership, informing shareholders that while it has communicated with representatives from both the UK and US, it had positive discussions with the American government but required greater initiative from British officials.

The company called on UK officials to protect the needs of niche automakers like Aston Martin, which provide numerous employment opportunities and contribute to regional finances and the broader UK automotive supply chain.

Global Trade Effects

The US President has disrupted the global economy with a tariff conflict this year, heavily impacting the automotive industry through the introduction of a 25 percent duty on April 3, on top of an previous 2.5% levy.

In May, American and British leaders reached a agreement to cap tariffs on one hundred thousand UK-built vehicles per year to 10%. This tariff level took effect on 30th June, coinciding with the last day of the company's second financial quarter.

Trade Deal Concerns

However, Aston Martin expressed reservations about the bilateral agreement, arguing that the introduction of a US tariff quota mechanism adds further complexity and restricts the company's ability to accurately forecast earnings for the current fiscal year-end and possibly each quarter starting in 2026.

Other Challenges

Aston Martin also pointed to weaker demand partly due to increased potential for logistical challenges, especially after a recent cyber incident at a leading British car producer.

UK automotive sector has been rattled this year by a cyber-attack on Jaguar Land Rover, which prompted a production freeze.

Financial Response

Stock in the company, traded on the LSE, dropped by more than 11% as markets opened on Monday morning before recovering some ground to be down 7%.

The group delivered 1,430 vehicles in its third quarter, falling short of previous guidance of being roughly equal to the one thousand six hundred forty-one vehicles sold in the equivalent quarter last year.

Upcoming Initiatives

Decline in sales coincides with the manufacturer prepares to launch its flagship hypercar, a mid-engine supercar priced at approximately £743,000, which it expects will increase earnings. Deliveries of the vehicle are scheduled to begin in the final quarter of its fiscal year, although a forecast of about 150 units in those final quarter was below previous expectations, reflecting technical setbacks.

Aston Martin, well-known for its roles in the 007 movie series, has initiated a evaluation of its upcoming expenditure and spending plans, which it indicated would probably result in lower capital investment in R&D versus earlier forecasts of approximately £2 billion between its 2025 and 2029 fiscal years.

The company also informed shareholders that it does not anticipate to generate positive free cash flow for the second half of its present fiscal year.

The government was approached for comment.