According to Reuters, on September 30, British luxury car manufacturer Aston Martin warned that its core profits for the entire year of 2024 would decline due to disruptions in the automotive parts supply chain and a weak Chinese market. The company also lowered its annual production forecast, leading to an 8% drop in its stock price during early trading.
Aston Martin stated that it now expects its adjusted core profits and wholesale sales for the third quarter to be below market expectations, and its gross margin for this year is also projected to be slightly lower than the previous expectation of 40%.
Additionally, Aston Martin indicated that it no longer anticipates achieving positive free cash flow in the first half of this year and has reduced its wholesale sales target for 2024 by approximately 1,000 units to address challenges in the Chinese market, the world's largest automotive market.
The company noted that multiple automotive parts suppliers have experienced supply disruptions, leading to increasing delays in the arrival of components. As a result, the production time for more vehicles may be extended, which could further delay deliveries.
Aston Martin's new CEO, Adrian Hallmark, stated in a release: "Achieving the company's ambitious plans for 2024 requires near-perfect execution. However, it is clear that we need to take swift action to adjust our production for 2024."
Aston Martin has ceased production of its old models and anticipates that the ramp-up of production for its new models will begin in the second half of this year, driving revenue and profit growth.
Currently, Aston Martin's sales in China are showing a downward trend. In July, the company announced plans to launch its next-generation sports car in China to reverse its declining position in the Chinese automotive market.
In addition to Aston Martin, Stellantis also issued a profit warning on September 30 and lowered its financial expectations for 2024. Previously, Volkswagen Group, Mercedes-Benz, and BMW had also adjusted their annual financial forecasts downward.
