British luxury automaker Aston Martin reported a larger-than-anticipated quarterly loss and reduced its 2023 volume projections, mainly due to production complications associated with its new DB12 sports car. This development sent the company’s shares tumbling more than 7% in early trading, casting a shadow over the Gaydon-based automaker.
DB12 Production Issues Impact 2023 Volume Outlook
Aston Martin had initiated DB12 deliveries in the previous quarter and initially aimed for a 2023 volume of approximately 7,000 units. However, the company has revised its outlook, now projecting a volume of 6,700 units. The setback was attributed to problems related to supplier readiness and delays in integrating a new platform essential for the upgraded infotainment system.
Challenges Resolved, Strong Demand Continues
Aston Martin announced that the issues affecting production have been successfully resolved. The automaker has witnessed unwavering demand, with a robust order backlog extending into the second quarter of the upcoming year. Aston Martin’s Executive Chairman, Lawrence Stroll, expressed optimism about the exceptional demand for the DB12, attracting new customers, with approximately 55% being first-time buyers of the brand.
2023 Outlook Maintained Amid Industry Challenges
Despite these production hiccups, Aston Martin maintains the rest of its 2023 outlook, with ongoing strong demand. The company is determined to enhance its financial stability and margins by introducing next-generation sports cars and limited editions throughout the current and following year.
Auto Industry Under Pressure
This setback for Aston Martin comes at a time when other automakers have faced challenges as well. Competitors like Mercedes-Benz cited inflation and other factors impacting their recent earnings, while Porsche AG warned of the luxury sector’s struggle due to reduced consumer spending amidst rising interest rates.
Hurdles and High Hopes for Aston Martin
Hargreaves analyst Sophie Lund-Yates emphasized the importance of Aston Martin meeting its profit and cash flow targets, especially after seeking investments earlier this year. The London-listed company disclosed an adjusted operating loss of £48.4 million ($58.82 million) for the quarter ending on September 30, with a revenue of £362.1 million. These figures fell short of analysts’ expectations, who had foreseen an adjusted operating loss of £38 million on a net revenue of £370 million. Aston Martin now faces the task of overcoming these hurdles to secure its financial future.