Aston Martin shocked investors today with a warning that it will make around 1,000 few cars than expected this year as a result of “disruption in its supply chain and continued macroeconomic weakness in China.”
Shares in the company slumped 22.6p, or around 14%, to 136.9p in early trading on the news.
The 125 year old supercar manufacturer, based in Gaydon in Warwickshire, also said earnings this year will be “slightly below” 2023 levels and the second half is no longer expected to be cash positive.
In an update to shareholders the luxury motor brand said: “External factors within the global automotive industry, including supply chain disruption and weak demand in China, are now impacting Aston Martin’s volume outlook for the remainder of 2024.
“Concurrent with the significant ramp-up in production for the second half of the year, following new model introductions, the company is experiencing a growing number of late component arrivals due to disruption at several of its suppliers. As a result, an increasing number of vehicles are taking longer to complete, with these issues impacting the efficiency of its operations and delaying the delivery of its vehicles.”
The company said wholesale volumes this year “are now expected to decline by high single digit percentage compared with FY 2023 (previously high single digit volume growth)” while the gross margin is “now expected to be modestly below 40% (previously targeting c. 40%)”
Targets for 2025 remain unchanged.
CEO Adrian Hallmark, Aston Martin Chief Executive Officer said: “Having been with the Company for a month I am even more convinced than before in its growth potential. The team at Aston Martin has done an exceptional job in launching a fully reinvigorated core range of vehicles over the last 18 months.
“Near perfect execution was required to meet the company’s ambitious 2024 plan. However, it has become clear that we need to take decisive action to adjust our production volumes for 2024 given a combination of supplier disruption, the weak macroeconomic environment in China and a proactive decision to strategically re-align our production plans to optimise efficiency and achieve a more balanced delivery cadence in the future.”
Chairman Lawrence Stroll, said: “When the Yew Tree Consortium made its significant investment in Aston Martin in 2020, we did this with a long-term view of the necessary commitment and turnaround required to unlock the enormous value potential of this iconic brand. I remain steadfast in this view and now, with the calibre and experience Adrian Hallmark brings, I am extremely confident in the Company’s ability to realise the full potential of its ultra-luxury high performance strategy.”
