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BUSINESS

Aston Martin cuts volume target as new sports car hits production snag

(Reuters) -British luxury carmaker Aston Martin posted a bigger than expected quarterly loss on Wednesday and lowered its 2023 volume outlook due to production issues for its new DB12 sports car.

Shares in the Gaydon-based company were down more than 7% in early trading.

Aston Martin started delivery of its first next-generation sports car, DB12, last quarter and expects 2023 volume to be 6,700 units, down from an earlier forecast of about 7,000 units.

Production was affected by “supplier readiness” and delays in integration of its new platform that supports the redeveloped infotainment system, it said.

These issues are now resolved, with demand staying strong and orders well into the second quarter of next year, it added.

“The launch of the DB12, which has seen extraordinary demand, is driving a reappraisal of Aston Martin amongst new audiences, with 55% of initial DB12 customers new to the brand,” Executive Chairman Lawrence Stroll said in a statement.

Aston Martin retained the rest of its 2023 outlook, saying demand remained strong as it plans to bolster cash and margins by rolling out next-generation sports cars and limited editions this year and next.

Other automakers over the last week had painted a much bleaker image, with Mercedes-Benz saying inflation and other factors had weighed on its earnings in recent months and Porsche AG warning the luxury sector was also feeling the hit of dampened consumer spending as interest rates rise.

“Having come cap-in-hand to investors in the summer, it’s crucial that Aston Martin comes good on its plans to fire up its profit and cash flow engines,” Hargreaves analyst Sophie Lund-Yates wrote in a note.

The London-listed company reported an adjusted operating loss of 48.4 million pounds ($58.82 million) on revenue of 362.1 million pounds in the three-month period ended Sept. 30.

Analysts on average had expected an adjusted operating loss of 38 million pounds on net revenue of 370 million pounds.

($1 = 0.8229 pounds)

(Reporting by Yadarisa Shabong in Bengaluru; Editing by Sherry Jacob-Phillips and David Evans)

 

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