Aston Martin, the renowned British luxury car manufacturer, recently disclosed a larger-than-anticipated quarterly loss, which was attributed to production challenges associated with its new DB12 sports car.
The company, headquartered in Gaydon, experienced a substantial dip in its shares, plummeting more than 7% during early trading.
The quarter witnessed Aston Martin commencing the delivery of its inaugural next-generation sports car, the DB12.
However, the company was compelled to revise its 2023 volume projection to 6,700 units, down from the initial estimate of approximately 7,000 units.
This downgrade was primarily due to obstacles in production related to “supplier readiness” and integration delays for the novel platform supporting the revamped infotainment system.
The carmaker has successfully addressed these issues, and the demand for the DB12 remains robust.
Aston Martin has continued to receive orders well into the second quarter of the coming year.
Executive Chairman Lawrence Stroll remarked on the remarkable demand for the DB12, which has attracted a new audience, with 55% of initial DB12 customers being newcomers to the brand.
Despite this setback, Aston Martin is optimistic about the rest of its 2023 outlook.
Demand for its vehicles remains strong, and the company intends to bolster its cash reserves and margins by launching next-generation sports cars and limited editions in the current year and the next.
While other automakers have expressed concerns over recent economic conditions, with Mercedes-Benz citing inflation and other factors impacting its earnings, and Porsche AG warning about the impact of rising interest rates on luxury consumer spending, Aston Martin is actively working to enhance its profitability and cash flow.
Hargreaves analyst Sophie Lund-Yates emphasized the importance of Aston Martin fulfilling its commitment to boost profits and cash flow after seeking investor support in the summer.
For the quarter ending on September 30, the London-listed company reported an adjusted operating loss of £48.4 million ($58.82 million) on revenue of £362.1 million.
This result fell short of analysts’ expectations, as they had anticipated an adjusted operating loss of £38 million on net revenue of £370 million.