Aston Martin Issues Profit Warning Amid American Trade Pressures and Requests Government Support

The automaker has attributed an earnings downgrade to Donald Trump's tariffs, as it urging the UK government for more proactive support.

The company, which builds its vehicles in Warwickshire and south Wales, lowered its profit outlook on Monday, representing the another revision in the current year. The firm expects deeper losses than the previously projected £110 million deficit.

Requesting Official Backing

Aston Martin voiced concerns with the UK government, informing investors that while it has communicated with officials from both the UK and US, it had positive discussions with the American government but needed greater initiative from British officials.

The company called on UK officials to safeguard the interests of small-volume manufacturers like Aston Martin, which create thousands of jobs and contribute to regional finances and the wider British car industry network.

Global Trade Impact

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

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

Trade Deal Concerns

Nonetheless, Aston Martin expressed reservations about the trade deal, arguing that the implementation of a American duty quota system introduces additional complications and restricts the group's ability to accurately forecast financial performance for the current fiscal year-end and possibly each quarter starting in 2026.

Additional Challenges

The carmaker also cited reduced sales partially because of increased potential for logistical challenges, especially following 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 led to a manufacturing halt.

Financial Response

Shares in the company, listed on the LSE, fell by over 11 percent as trading opened on Monday morning before recovering some ground to stand 7 percent lower.

Aston Martin sold one thousand four hundred thirty vehicles in its third quarter, missing earlier projections of being roughly equal to the one thousand six hundred forty-one cars sold in the equivalent quarter last year.

Upcoming Initiatives

The wobble in demand coincides with Aston Martin prepares to launch its Valhalla, a rear-engine hypercar costing approximately £743,000, 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 about 150 deliveries in those three months was below earlier estimates, reflecting engineering delays.

Aston Martin, well-known for its roles in James Bond films, has initiated a evaluation of its upcoming expenditure and investment strategy, which it said would likely lead to reduced spending in R&D versus previous guidance of approximately £2 billion between its 2025 to 2029 financial years.

The company also informed shareholders that it does not anticipate to generate positive free cash flow for the latter six months of its present fiscal year.

The government was approached for comment.