Aston Martin has announced a reduction in its car delivery forecast for this year, attributing the decrease to supply chain issues and software problems that have affected the production of its premier sports car.
The high-end automaker reported that the hold-ups in delivering the DB12 model played a significant role in the £48.4m losses incurred in the third quarter, surpassing the £38m loss anticipated by analysts.
The shares of Aston Martin experienced a sharp decline of over 15% in early trading on Wednesday, hitting their lowest point since May.
In total, the company now expects to sell 6,700 units of the DB12 grand tourer this year, a decrease from its initial goal of 7,000 units.
This development represents a major challenge for billionaire owner Lawrence Stroll in his ongoing efforts to revitalize the brand.
Aston Martin’s stock experienced a robust surge in the first half of the year, buoyed by a string of agreements with China’s Geely and Lucid, a competitor of Tesla. However, since August, the shares have plummeted by over 50%.
Analysts at Barclays commented that the challenges associated with the demand and production escalation of the DB12 are not promising signs, noting that the financial outcomes presented were less than persuasive.
Despite encountering production hold-ups throughout its third quarter, Aston Martin remains confident in achieving its £2bn annual sales target by 2025, a crucial step towards reviving its profitability.
The company anticipates reporting a “substantial growth” in comparison to the previous year, attributing this expected increase to a rise in production volumes and an enhanced gross margin.
Amedeo Felisa, the Chief Executive Officer, praised the “extraordinary demand” for the DB12. However, he acknowledged that “due to minor delays in the initial stages of production ramp-up, we have slightly adjusted our volume forecasts for the year.”
In the previous year, Saudi Arabia’s sovereign wealth fund made a significant investment in the car manufacturer as part of a £575m rights issue. This move was strategized to aid in reducing the company’s debts.
Following this investment, the Saudi Public Investment Fund emerged as Aston Martin’s second-largest shareholder, positioned just behind Mr. Stroll.
