<\/p>\n
<\/p>\n
Adrian Hallmark, CEO<\/strong><\/b> ofAston Martin Lagonda Ltd<\/strong><\/b>, announced early last week that he was revising production forecasts following the<\/strong><\/b> company’s first profit warning<\/strong><\/b>.<\/p>\n <\/p>\n The Gaydon-based firm now expects to produce 1,000 fewer cars in 2024<\/strong><\/b> than it had originally announced for the year. Full-year sales for 2024<\/strong><\/b> are expected to be lower than for the previous year.<\/strong><\/b><\/p>\n <\/p>\n This revision of forecasts comes at a time when the British manufacturer is facing supply chain problems and a sluggish Chinese market<\/strong><\/b>. Aston Martin is the latest in a long line of automakers to report a slowdown in the market.<\/strong><\/b><\/p>\n <\/p>\n <\/p>\n In the wake of the first profit warning<\/strong><\/b> announced by its new CEO, Aston Martin Lagonda Ltd<\/strong><\/b> reporteda disruption in the production of four car models<\/strong><\/b>. This situation has led the Warwickshire-based company to revise its targets for the year<\/strong><\/b>.<\/p>\n <\/p>\n The carmaker said it was reducing its production volume for 2024 to 6,000 cars, a 14% drop on its previous forecast<\/strong><\/b> of 7,000 cars.<\/p>\n\n <\/p>\n The company cited ongoing supply chain disruptions and macroeconomic challenges in China<\/strong><\/b> – the world’s largest automotive market – as the main reasons for the shortfall.<\/p>\n <\/p>\n Presented by the company as a \u201cstrategic realignment<\/strong><\/b> \u201d, this reduction in the volume of cars leaving the factory is intended to stabilize production over the coming quarters<\/strong><\/b>, although the company has acknowledged that it will not be cash flow positive in the second half of 2024, as it had previously promised.<\/p>\n <\/p>\n Adrian Hallmark<\/strong><\/b>, at the helm of the automaker since October 1 after almost 7 years as president and CEO of Bentley Motors<\/strong><\/b>, noted that Aston Martin’s ambitious plans for 2024 require near-perfect execution. \u201cIt has become clear that we need to take decisive action to adjust our production volumes for 2024<\/strong><\/em><\/b> due to supplier disruption and the weak macro-economic environment in China”<\/em>, he said.<\/p>\n <\/p>\n Aston Martin sales<\/strong><\/b> were already on a downward trend in China<\/strong><\/b>. In July, Aston Martin Lagonda Ltd. announced the launch of new-generation sports cars in the country, in a bid to rectify the situation in this key market.<\/p>\n <\/p>\n <\/p>\n The company attributes this slowdown to supplier disruptions following recent fires and floods<\/strong><\/b>, which led to the late arrival of key components at manufacturing plants.<\/p>\n <\/p>\n This has resulted in production slowdowns and delays in vehicles coming off the assembly line<\/strong><\/b>. Aston Martin production was particularly affected by theinsolvency of the main German suppliers, Recaro and Eissmann<\/strong><\/b>, who specialize in the manufacture of seats and dashboards respectively.<\/p>\n <\/p>\n Sales of the Aston Martin DBX 4\u00d74<\/strong><\/b>, one of the company’s best-sellers, have also experienced difficulties in China<\/strong><\/b>, compounding the problems.<\/p>\n <\/p>\n <\/p>\n Despite these setbacks, Lawrence Stroll, Aston Martin’s billionaire chairman<\/strong><\/b> and Formula 1 enthusiast, who rescued the British company five years ago, remains confident<\/strong><\/b>.<\/p>\n <\/p>\n He has renewed his long-term commitment to the company’s turnaround plan, believing that Aston Martin will achieve its 2025 targets<\/strong><\/b>. That is, sales of \u00a32 billion with an underlying operating profit (EBITDA) of \u00a3500 million.<\/p>\n <\/p>\n Aston Martin’s third-quarter results are due on October 30<\/strong><\/b>, the same day as the UK government’s autumn budget announcement. Despite the current challenges, the company expects a better performance in 2025<\/strong><\/b>, with Goldman Sachs forecasting sales of \u00a32.07 billion and EBITDA of \u00a3540 million, as well as pre-tax profits of \u00a320 million.<\/p>\n <\/p>\n <\/p>\n Other European automakers have reported similar difficulties in fiscal 2024<\/strong><\/b>. Larger companies such as Mercedes-Benz, BMW<\/strong><\/b> and Stellantis<\/strong><\/b> – makers of the Jeep brand – have revised downwards their own profit forecasts for the year in a more uncertain climate for their industry.<\/p>\n <\/p>\n For its part, Volkswagen<\/strong><\/b> said it might have to close plants in Germany for the first time ever, while Porsche reported a \u201csevere supply shortage\u201d for aluminum components in August, after a key supplier’s facility in Switzerland was flooded.<\/p>\n <\/p>\n Despite Chairman Lawrence Stroll’s optimism intact, the announcement of the new CEO’s revised outlook sent Aston Martin Lagonda Ltd. shares<\/strong><\/b> plummeting to their lowest level since November 2022<\/strong><\/b>.<\/p>\n <\/p>\n Analysts at JP Morgan commented : \u201cWe believe <\/em>the new management team<\/strong><\/em><\/b> will now have to work hard to <\/em>restore confidence in near-term finances, execution and commercial potential from here on in<\/strong><\/em><\/b>.<\/em><\/p>\n <\/p>\n <\/span><\/p>\n <\/span><\/p>\n \t\tStrategic realignment<\/h2>\n
Natural disasters to blame<\/h2>\n
Lawrence Stroll still confident<\/h2>\n
Far from an isolated case in Europe<\/h2>\n