Aston Martin warns Trump's 'disruptive' tariffs will dent profits

Daily Mail​

5 days ago

Aston Martin expects to just break even this year as it warned 'evolving and disruptive' US trade tariffs would harm profits this year.
The iconic British carmaker, which is also suffering subdued demand in Asian markets, cut its annual profit forecast on Wednesday after it was forced to scale back production and imports to the US.
US tariffs have pummelled car firms, forcing companies, including GM, Volkswagen and Hyundai, to either book vast losses, issue profit warnings or slash their financial forecasts.
Aston Martin said it now expects its annual adjusted operating profit to roughly break even.
The group's chief executive, Adrian Hallmark, said the tariff situation was 'unhelpful to our operations' during the second quarter of the year.
Hallmark's turnaround effort to boost efficiency and cut costs has been hit by Trump's tariffs on car sales in its biggest market.
Hallmark warned that demand in the Asia-Pacific region would remain supressed in the near term.
Sales in Asia-Pacific, which account for more than a quarter of Aston Martin's revenue, fell 9 per cent in the first half of 2025, with volumes in China broadly flat.
The business, which had earlier forecast positive operating earnings in 2025, added that it now expected its gross margin to be broadly flat from a year ago.
Revenue fell 34 per cent in the second quarter to £221million, with lower sales of its hypercars contributing to the downturn.
The group's operating loss for the second quarter came in at £67.4million, down from £47.4million at the same point a year ago.
On tariffs, Hallmark added: 'In response, we adjusted production and limited imports through April and May while awaiting confirmation of a trade agreement between the UK and the US, leveraging existing inventory held by our US dealers in that period.
'We resumed shipments to the U.S. in June in anticipation of a finalised agreement which came into effect on 30 June 2025.
'We continue to actively engage the UK government to urge them to improve the quota mechanism to ensure fair access for the whole UK car industry to the 10 per cent rate on an ongoing basis.'
Higher tariffs may hurt demand, disrupt distribution, and raise costs for the business, which is responding by reviewing supply chain and pricing strategies to reduce possible negative impacts, it said.
As part of a deal struck between the UK and US which came into effect in June, British carmakers will pay tariffs of 10 per cent on cars exported to the US.
The 10 per cent tariff is less than the previous tariff of 27.5 per cent, but considerably higher than the 2.5 per cent levy in place before Trump's fresh trade tariffs.
Plus, the lower tariff rate only counts for the first 100,000 UK cars sold in the US on a first come, first served basis. All deliveries above that threshold face the higher 27.5 per cent tariff.
Aston Martin limited shipments to the US in April and May, before resuming them last month.
The firm's net debt increased to £1.38 billion at the end of June.
Amid uncertainty over tariffs, Aston Martin maintained its goal of becoming free-cash flow positive later this year.
Aston Martin said it was edging closer to a deal to sell its minority stake in the Formula One racing team that bears its name for as much as £110million, which is a higher amount than previously targeted.
Aston Martin shares fell 3.3 per cent to 76.15p on Wednesday, having fallen over 50 per cent in the last year.