Aston Martin Lagonda, the only British carmaker listed on the London Stock Exchange, is facing major financial setbacks, failing to meet all 2024 targets such as production cuts, supply chain issues, and a sharp decline in performance due to the impact of Chinese demand.
The luxury carmaker, led by new chief executive Adrian Hallmark, is burning through more than £1 million a day, with net debt rising to £1.21 billion – almost 50% higher than last year.
The company, controlled by CEO Lawrence Stroll alongside the Saudi Public Investment Fund and Chinese automaker Geely, faces ongoing challenges. After a disappointing third quarter, in which Aston Martin reported a £12m loss despite an 8% rise in revenue to £391m, it revised its forecasts. Hallmark, which previously worked with Bentley, cut production targets by 14% to 6,000 cars per year and recalibrated growth expectations.
One of the biggest blows to Aston Martin was the decline in demand for the DBX 4×4, especially in China – the world’s largest car market – where sales of this model fell by 54%. The DBX, once Aston’s best-selling car, now accounts for just 30% of sales. The company’s overall turnover remained down 17% this year, with revenues down 4% to £994m.
In response to these setbacks, Aston Martin has abandoned its goal of achieving cash flow break-even by the end of 2024. Hallmark remains optimistic about the company’s “diverse, dynamic and desirable portfolio”, stressing that a stable supply chain and stable markets can regain momentum. “We are on track to meet our revised full-year guidance,” he said, stressing a renewed focus on adjusting production volumes to align with market conditions and supply constraints.
Aston Martin shares rose slightly after the announcement, closing at 111p, but shares are still a long way from the £4.3bn valuation the company boasted when it floated six years ago. As the automaker faces increasing competition in the luxury electric vehicle segment, all eyes will be on its ability to stabilize operations and gain market share amid the growing challenges.