Aston Martin Issues Earnings Alert Due to American Trade Challenges and Seeks Government Support

Aston Martin has attributed a profit warning to Donald Trump's trade duties, while simultaneously calling on the British authorities for more proactive support.

This manufacturer, producing its vehicles in Warwickshire and south Wales, lowered its profit outlook on Monday, representing the another downgrade this year. It now anticipates deeper losses than the earlier estimated £110 million shortfall.

Seeking Government Support

The carmaker expressed frustration with the UK government, informing shareholders that while it has engaged with representatives from both the UK and US, it had productive talks directly with the US administration but required more proactive support from British officials.

It urged British authorities to protect the interests of small-volume manufacturers like Aston Martin, which provide thousands of jobs and contribute to regional finances and the broader UK automotive supply chain.

International Commerce Impact

Trump has disrupted the worldwide markets with a trade war this year, significantly affecting the car sector through the imposition of a 25% tariff on April 3, on top of an existing 2.5% levy.

In May, American and British leaders reached a deal to cap tariffs on one hundred thousand British-made vehicles annually to 10%. This rate came into force on June 30, aligning with the last day of Aston Martin's Q2.

Agreement Criticism

However, Aston Martin criticised the bilateral agreement, arguing that the introduction of a US tariff quota mechanism adds additional complications and limits the group's ability to accurately forecast earnings for the current fiscal year-end and potentially quarterly from 2026 onwards.

Other Challenges

Aston Martin also pointed to reduced sales partially because of greater likelihood 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 the country's largest automotive employer, which prompted a manufacturing halt.

Market Reaction

Stock in Aston Martin, listed on the LSE, 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 vehicles in its third quarter, missing earlier projections of being broadly similar to the 1,641 cars delivered in the equivalent quarter the previous year.

Future Initiatives

The wobble in demand coincides with the manufacturer prepares to launch its flagship hypercar, a rear-engine supercar priced at around £743,000, which it expects will boost profits. Deliveries of the vehicle are scheduled to start in the final quarter of its fiscal year, though a forecast of approximately one hundred fifty units in those three months was below previous expectations, reflecting engineering delays.

Aston Martin, famous for its appearances in the 007 movie series, has initiated a review of its upcoming expenditure and spending plans, which it said would probably lead to lower spending in R&D compared with previous guidance of about £2bn between its 2025 and 2029 fiscal years.

The company also told investors that it does not anticipate to generate profitable cash generation for the second half of its present fiscal year.

The government was approached for a statement.