Aston Martin has issued a grim profit warning following a “very disappointing” year of falling sales and higher costs.
The British car manufacturer is now predicting adjusted profits of between £130 million ($170.46 million) and £140 million ($183.58 million), almost half of the £247 million ($323.39 million) it made the previous year, The Guardian reports.
Aston Martin has pinpointed a number of factors it says have contributed to the decline in profits. First is a 7 per cent decline in wholesale volumes, cars sold through other dealers, alongside higher marketing costs and a fall in its average selling price.
“The challenging trading conditions that we highlighted in November continued through the peak delivery period of December, resulting in lower sales, higher selling costs and lower margins,” Aston Martin chief executive Andy Palmer said.
Future Of The Brand: Aston Martin Estimates It’ll Sell Between 4,000 and 5,000 DBX SUVs A Year
The CEO added that Aston Martin was forced to discount more heavily than intended to sell its cars and paid higher-volume bonuses to dealers during a sales push in December.
Meanwhile, company share prices continue to slide. When Aston Martin hit the London Stock Exchange in October 2018 at £19 ($24.92 a share), it was valued at £4.3 billion ($5.64 billion). Shares now sit at roughly £4.50 ($5.90), meaning the niche automaker is now only worth a touch over £1 billion ($1.31 billion).
The future of Aston Martin arguably rests on the shoulders of the DBX. The automaker says it has received 1,800 orders for its first ever SUV, which is “significantly better than any other previous models.”
Aston Martin will borrow $100 million within the next four weeks at an interest rate of 15 per cent to push ahead with its future product plans. It is also reviewing other funding options and is having discussions with potential investors.
