Weak sales of new two-seater Vantage sports car compound torrid year for UK carmaker
The Aston Martin DBX, its first SUV.
Photograph: Richard Thompson
The luxury carmaker Aston Martin Lagonda has slumped to a third-quarter loss, blaming tough trading conditions in the UK and Europe and weak sales of its Vantage two-seater sports car.
The 106-year-old British marque has had a torrid year since floating on the stock market last October at £19, which valued the company at £4.3bn. The shares have since slumped, diving below £4 in August, as sales have fallen.
The company has pinned its hopes on a “second century plan” unveiled in 2016, under which it will launch seven new cars in seven years. The Vantage, which costs from £120,900, is the second model in the plan, but sales have been weaker than expected.
James Bond’s favourite car marque posted a £13.5m loss before tax in the three months to 30 September, against a profit of £3.1m a year earlier. Revenues fell 11% to £250.1m, and wholesale volume was down 16% to 1,497 vehicles. Retail sales fell 6%.
The third-quarter results showed revenues in the UK and Europe, Middle East and Asia were down 22% and 17% respectively. The Americas grew by 2% and Asia-Pacific fell 34%, against strong growth last year when the figures were boosted by the launch of the Vantage and DBS Superleggera.
Aston Martin said wholesale volumes would be lower than predicted for 2019 but within the range of market expectations, which came as a relief to investors. Shares rose nearly 8% in early trading and were later up 6.75% at 445.7p.
The company was forced to borrow $150m (£120m) at a hefty interest rate of 12% in September to shore up its finances. Andy Palmer, the chief executive, said: “Tough trading conditions, particularly in the UK and Europe, persist and whilst retail sales have grown 13% year-to-date, wholesale volumes remain under pressure.
“We remain pleased with the performance of DB11 and DBS Superleggera, however, the segment of the market in which Vantage competes is declining, and notwithstanding a growing market share, Vantage demand remains weaker than our original plans.
“As a consequence, total wholesale volumes are down year on year as we balance growth, brand positioning and dealer inventories. Additionally, we are taking actions to control our costs through an efficiency programme.”
The company is preparing for the launch and delivery of DBX, its first SUV, which will be manufactured at its new St Athan factory in south Wales. More than 300 people work at the plant, and the workforce is set to double ahead of the start of production next spring.
Aston Martin plans to make up to 5,000 DBXs a year, priced at £158,000 including three years’ servicing. It hopes the model will appeal to multimillionaire women in countries such as China and the US, broadening its traditional male-dominated sports car clientele.
Aston Martin said four of its cars will feature in the next James Bond film, out next April: the classic DB5 and V8 Saloon, along with the new DBS Superleggera and Valhalla.
Neil Wilson, the chief market analyst at Markets.com, said: “It will be hoping a little bit of Bond stardust will rub off on the brand with four Astons going to feature in the next 007 flick. It’s a good chance to showcase the new DBS Superleggera and Valhalla. It needs all the help it can get.”
Aston Martin said demand for special vehicles continued to be strong, although fewer had been made. It has delivered six of its most expensive new model, the DB4 GT Zagato Continuation, and a further 13 are to follow by the end of the year. It is sold together with the new 2019 DBS Zagato, for £6m the pair.
The DBS GT Zagato, which forms part of the centenary collection, has been unveiled and will be delivered in the second half of next year.