Aston Martin Lagonda, Britain’s only carmaker listed on the London Stock Exchange, faces significant financial headwinds and misses all 2024 targets as production cuts, supply chain issues and a sharp decline in Chinese demand impact performance .
The luxury car maker, led by new CEO Adrian Hallmark, is burning through more than £1m a day of cash, while net debt is rising to £1.21bn – almost 50% higher than a year ago.
The company, which is run by executive chairman Lawrence Stroll along with Saudi PIF and Chinese carmaker Geely, has faced ongoing challenges. After a disappointing third quarter, in which Aston Martin reported a £12 million loss despite an 8% increase in sales to £391 million, the company revised its outlook. Hallmark, formerly of Bentley, cut production targets by 14% to 6,000 vehicles per year and has recalibrated growth expectations.
One of the biggest blows to Aston Martin has been the plummeting demand for the DBX 4×4, especially in China – the world’s largest car market – where sales of the model have fallen by 54%. The DBX, previously Aston’s bestseller, now accounts for just 30% of sales. The company’s overall volumes remain 17% lower this year, while revenues are down 4% to £994 million.
In response to these setbacks, Aston Martin has abandoned its goal of achieving breakeven cash flow by the end of 2024. Hallmark remains optimistic about the company’s “diverse, dynamic and desirable portfolio,” claiming that a stable supply chain and stabilized markets will restore momentum. “We are on track to meet our revised full-year expectations,” he said, underscoring the renewed focus on adjusting production volumes to align with market conditions and supply constraints.
Aston Martin shares rose slightly after the announcement to close at 111p, but the shares remain a long way from the £4.3 billion valuation the company boasted when it floated six years ago. As the automaker faces increasing competition in the luxury electric segment, all eyes will be on its ability to stabilize its business and capture market share amid mounting challenges.