FTSE 250: Aston Martin’s share price nosedives as car maker cuts delivery forecast

A close up of the Aston Martin DB5 used in the James Bond films Goldfinger and Thunderball before it was sold for 2.6 million at Battersea Evolution in London by RM Auctions.
Aston Martin is facing supply chain snags. Photo: PA

Aston Martin (AML.L) has tumbled over 14% towards a record low after warning it will deliver fewer vehicles than expected this year due to persistent supply chain troubles.

The car brand now expects to deliver as few as 6,200 cars, down from an earlier forecast of more than 6,600. It comes after supply shortages prevent around 400 vehicles from being shipped in the third quarter.

The car manufacturer said profit market margins would be lower than original forecasts as it was also impacted by weakness in the pound.

Pre-tax losses for the quarter to September more than doubled to £225.9m, compared with £97.9m over the same period last year.

Read more: Electric car sales hit by high energy bills, survey reveals

The car manufacturer added that the supply chain issues are having a “more prolonged” impact on working capital than previously expected.

Carmakers globally have faced problems sourcing parts and chips in the pandemic and difficulties have continued since Russia's invasion of Ukraine.

Shares in the company fell more than 12% in early Wednesday trade, making it the worst-performing stock on the FTSE 250.

“Aston Martin is facing a huge challenge to reduce its debt level. This is particularly concerning in a deteriorating macro backdrop. It has struggled since leaving Ford’s control, with different owners having different objectives and no consistent strategy,” Orwa Mohamad, analyst at Third Bridge, said.

“Our experts say that the company has very limited room for a further price increase to pass on the inflation costs. However, there may be a chance of a 5-6% price increase for the launch of the facelift next year because it will bring more value to customers,” he added.

Lawrence Stroll, executive chairman of Aston Martin Lagonda, said situation is “already improving” but has knocked the company’s short-term financial performance.

Read more: UK manufacturing falls at fastest pace since 2020 lockdowns

“Over the last two quarters we have encountered specific supply chain challenges that have delayed our ability to meet customer demand.

“Although these headwinds, which are already improving in the fourth quarter, have disrupted our near-term financial performance and modestly impacted our full year guidance, the medium and long-term outlook is robust.”

Meanwhile, revenues increased by 33% to £315.5m for the latest quarter.

Watch: Chinese automaker Geely buys nearly 8% stake in Aston Martin