Aston Martin Issues Profit Warning Due to US Tariff Pressures and Requests Government Assistance

Aston Martin has attributed an earnings downgrade to US-imposed trade duties, while simultaneously urging the UK government for greater proactive support.

This manufacturer, which builds its vehicles in Warwickshire and south Wales, lowered its earnings forecast on Monday, representing the second such revision in the current year. It now anticipates a larger loss than the earlier estimated £110m shortfall.

Requesting Government Support

The carmaker expressed frustration with the British leadership, telling shareholders that despite having communicated with officials on both sides, it had positive discussions with the US administration but required more proactive support from UK ministers.

The company called on British authorities to protect the interests of niche automakers like Aston Martin, which provide thousands of jobs and add value to local economies and the wider British car industry network.

International Commerce Effects

The US President has shaken the global economy with a tariff conflict this year, heavily impacting the car sector through the introduction of a 25% tariff on April 3, on top of an existing 2.5 percent charge.

In May, the US president and Keir Starmer reached a agreement to cap duties on 100,000 British-made cars annually to 10%. This rate took effect on 30th June, aligning with the final day of Aston Martin's Q2.

Trade Deal Concerns

However, Aston Martin expressed reservations about the bilateral agreement, stating that the introduction of a US tariff quota mechanism adds further complexity and restricts the group's capacity to precisely predict financial performance for the current fiscal year-end and potentially each quarter starting in 2026.

Other Challenges

The carmaker also pointed to weaker demand partially because of greater likelihood for supply chain pressures, particularly after a recent cyber incident at a leading British car producer.

UK automotive sector has been shaken this year by a cyber-attack on the country's largest automotive employer, which prompted a manufacturing halt.

Financial Response

Stock in the company, traded on the LSE, fell by more than 11% as markets opened on Monday morning before recovering some ground to be down 7%.

The group delivered one thousand four hundred thirty cars in its Q3, missing earlier projections of being broadly similar to the 1,641 vehicles delivered in the equivalent quarter last year.

Future Initiatives

Decline in sales comes as the manufacturer prepares to launch its Valhalla, a rear-engine supercar costing around £743,000, which it expects will boost profits. Shipments of the car are scheduled to begin in the last quarter of its financial year, although a forecast of about 150 deliveries in those three months was lower than earlier estimates, reflecting technical setbacks.

The brand, well-known for its appearances in James Bond films, has started a review of its upcoming expenditure and investment strategy, which it said would likely lead to reduced spending in engineering and development compared with earlier forecasts of about £2bn between its 2025 to 2029 fiscal years.

Aston Martin also told shareholders that it no longer expects to generate positive free cash flow for the second half of its present fiscal year.

UK authorities was approached for a statement.