Aston Martin Lagonda Global Holdings Plc, the famous British luxury car manufacturer, has had to revise its annual delivery expectations downwards due to supply-chain issues impacting the production of its new DB12 sports car. The company now anticipates shipping around 6,700 vehicles this year, compared to its previous estimate of 7,000. While Aston Martin has seen growth in wholesale deliveries in regions such as the Americas and Europe, sales in China plummeted by 57% in the first nine months of 2021.
Aston Martin acknowledged that the production issues with the DB12 have been resolved, but their impact on third-quarter volume and full-year production capacity cannot be overlooked, the company stated in a release on Wednesday. The decline in China's market was attributed to "weak market conditions," although no further details were provided.
Following the news, Aston Martin shares fell up to 6.2% in London, though they are still showing a significant gain of around 33% for the year. The luxury carmaker is currently undergoing a turnaround led by Executive Chairman Lawrence Stroll, who rescued the company last year. Since then, Aston Martin has successfully raised capital by attracting investors like Chinese conglomerate Geely Automobile Holdings Ltd. and Saudi Arabia's Public Investment Fund.
However, despite the supply-chain challenges impacting the DB12, Aston Martin reaffirmed its other financial targets for the year, expressing confidence in achieving positive free cash flow in the fourth quarter. The company cited strong demand for its luxury cars and the commencement of deliveries of high-margin models such as the Valour, priced at £1.1 million, as contributing factors to this positive outlook.
In the third quarter, Aston Martin recorded an adjusted operating loss of £48.4 million ($58.8 million), wider than the £37.5 million loss predicted by analysts. Sales also fell below estimates during the same period.
Aston Martin remains committed to its long-term vision and is determined to regain its market position as a leading luxury car manufacturer. While the company has faced challenges with its supply chain and Chinese market, it believes that its strategic initiatives and strong product lineup will pave the way for future success.