Aston Martin Releases Profit Warning Amid US Tariff Pressures and Seeks Government Support

Aston Martin has blamed an earnings downgrade to US-imposed tariffs, as it urging the UK government for greater proactive support.

The company, which builds its cars in factories across England and Wales, lowered its profit outlook on Monday, marking the second such revision this year. It now anticipates a larger loss than the earlier estimated £110 million shortfall.

Seeking Official Backing

The carmaker voiced concerns with the British leadership, telling investors that despite having communicated with representatives from both the UK and US, it had positive discussions with the American government but needed greater initiative from British officials.

It urged British authorities to safeguard the needs of small-volume manufacturers like Aston Martin, which create numerous employment opportunities and contribute to local economies and the wider British car industry network.

Global Trade Impact

The US President has disrupted the worldwide markets with a trade war this year, heavily impacting the automotive industry through the introduction of a 25% tariff on April 3, on top of an previous 2.5 percent charge.

In May, American and British leaders reached a agreement to limit duties on one hundred thousand UK-built vehicles annually to 10 percent. This tariff level took effect on June 30, aligning with the final day of the company's second financial quarter.

Trade Deal Concerns

However, the manufacturer criticised the trade deal, stating that the introduction of a US tariff quota mechanism adds additional complications and restricts the company's capacity to precisely predict financial performance for the current fiscal year-end and possibly quarterly from 2026 onwards.

Other Challenges

The carmaker also cited reduced sales partially because of greater likelihood for supply chain pressures, especially after a recent cyber incident at a major UK automotive manufacturer.

The British car industry has been rattled this year by a cyber-attack on Jaguar Land Rover, which led to a manufacturing halt.

Market Response

Shares in Aston Martin, traded on the London Stock Exchange, dropped by more than 11% as markets opened on Monday morning before recovering some ground to be 7 percent lower.

The group sold 1,430 vehicles in its Q3, falling short of earlier projections of being broadly similar to the one thousand six hundred forty-one cars delivered in the same period the previous year.

Upcoming Plans

Decline in demand coincides with the manufacturer prepares to launch its Valhalla, a rear-engine hypercar costing around £743,000, which it expects will increase earnings. Shipments of the vehicle are scheduled to begin in the last quarter of its fiscal year, although a projection of approximately one hundred fifty units in those final quarter was lower than previous expectations, reflecting engineering delays.

The brand, famous for its appearances in the 007 movie series, has started a review of its future cost and investment strategy, which it indicated would likely lead to lower capital investment in engineering and development versus earlier forecasts of about £2bn between its 2025 and 2029 fiscal years.

The company also informed investors that it no longer expects to achieve profitable cash generation for the second half of its present fiscal year.

UK authorities was approached for comment.