🔗 Share this article

Aston Martin has attributed an earnings downgrade to Donald Trump's tariffs, as it calling on the British authorities for more proactive support.

The company, producing its vehicles in factories across England and Wales, lowered its profit outlook on Monday, representing the another downgrade in the current year. It now anticipates deeper losses than the earlier estimated £110 million deficit.

Requesting Government Support

The carmaker expressed frustration with the UK government, informing shareholders that despite having engaged with representatives on both sides, it had productive talks with the US administration but needed more proactive support from UK ministers.

The company called on British authorities to safeguard the interests of small-volume manufacturers such as itself, which create numerous employment opportunities and add value to regional finances and the broader UK automotive supply chain.

International Commerce Impact

Trump has shaken the global economy with a trade war this year, significantly affecting the car sector through the introduction of a 25 percent duty on 3rd April, on top of an existing 2.5 percent charge.

In May, the US president and Keir Starmer reached a agreement to cap duties on one hundred thousand British-made vehicles per year to 10 percent. This tariff level took effect on 30th June, aligning with the final day of the company's second financial quarter.

Trade Deal Concerns

However, the manufacturer expressed reservations about the trade deal, stating that the implementation of a American duty quota system introduces additional complications and limits the group's ability to accurately forecast earnings for this financial year end and possibly quarterly from 2026 onwards.

Other Challenges

Aston Martin also cited weaker demand partially because of greater likelihood for logistical challenges, especially after a recent digital attack at a major UK automotive manufacturer.

UK automotive sector has been shaken this year by a digital breach on Jaguar Land Rover, which prompted a manufacturing halt.

Market Reaction

Shares in the company, traded on the LSE, fell by more than 11% as trading opened on Monday at the start of the week before partially rebounding to be 7 percent lower.

Aston Martin sold 1,430 cars in its third quarter, missing earlier projections of being broadly similar to the 1,641 vehicles sold in the same period the previous year.

Upcoming Plans

Decline in sales coincides with Aston Martin prepares to launch its flagship hypercar, a mid-engine hypercar priced at around $1 million, which it hopes will increase earnings. Deliveries of the vehicle are scheduled to start in the final quarter of its financial year, though a projection of approximately one hundred fifty units in those final quarter was below previous expectations, reflecting technical setbacks.

Aston Martin, famous for its appearances in James Bond films, has initiated a evaluation of its upcoming expenditure and spending plans, which it said would likely lead to lower capital investment in engineering and development compared with earlier forecasts of about £2bn between its 2025 and 2029 financial years.

Aston Martin also informed shareholders that it does not anticipate to generate profitable cash generation for the latter six months of its present fiscal year.

UK authorities was contacted for a statement.