Aston Martin Lagonda has issued a stark warning that it expects to plunge into significant losses amid mounting pressure from US tariffs and supply chain disruption. The luxury carmaker now anticipates underlying losses exceeding £110 million, marking a sharp deterioration from previous forecasts.
This represents the second downgrade to the company's outlook since early July, highlighting the worsening challenges facing the premium automotive sector. Wholesale volumes are projected to fall by a mid-to-high single-digit percentage as global economic headwinds intensify.
Tariff pressures hit sales
The performance decline is being driven by what the company describes as "heightened challenges in the global macroeconomic environment, including the ongoing impact of tariffs". North America and Asia are experiencing particularly weak performance as trade tensions continue to bite.
In response to the deteriorating conditions, company bosses have launched an immediate review of costs and spending. The urgent cost-cutting measures reflect the severity of the trading environment facing luxury car manufacturers.
Supply chain crisis deepens
Aston Martin has also raised concerns about industry-wide supply chain pressures stemming from a major cyber attack at Jaguar Land Rover in late August. The attack forced JLR to halt manufacturing production for an entire month, with operations only partially resuming last week.
The disruption has placed enormous strain on smaller suppliers throughout the automotive sector. JLR operates the largest supply chain in the UK automotive industry, supporting approximately 120,000 jobs and consisting primarily of small and medium-sized businesses.
Government intervention announced
The Government has stepped in to provide stability, announcing a £1.5 billion loan guarantee to JLR aimed at giving suppliers certainty over payments. However, many suppliers are reportedly still experiencing severe cash flow problems despite the intervention.
Aston Martin said: "The global macroeconomic environment facing the industry remains challenging. This includes uncertainties over the economic impact from US tariffs and the implementation of the quota mechanism, changes to China's ultra-luxury car taxes and the increased potential for supply chain pressures, particularly following the recent cyber incident at a major UK automotive manufacturer."
Sources used: "PA Media" Note: This article has been edited with the help of Artificial Intelligence.
