Aston Martin slashes outlook amid supply chain disruptions
Aston Martin is cutting its predictions for 2024, blaming a disrupted supply chain and a continued macroeconomic weakness in China.
The luxury car manufacturer says it no longer expects to achieve positive free cash flow this year, with adjusted EBITDA now expected to be slightly below 2023.
It says it’s experiencing a growing number of late component arrivals due to disruption at several of its suppliers, resulting in a delay in operations and delivery.
Demand in China has also dropped, but Aston Martin believes as its macroeconomic environment improves, the market will be a significant opportunity.
To address the issues, Aston Martin has adjusted production volumes and says it will now make around 1,000 fewer cars before it ramps up production in the second half of the year following new model announcements.
Adrian Hallmark, Aston Martin Chief Executive Officer commented: “Having been with the Company for a month I am even more convinced than before in its growth potential. The team at Aston Martin has done an exceptional job in launching a fully reinvigorated core range of vehicles over the last 18 months.
“Near perfect execution was required to meet the Company’s ambitious 2024 plan. However, it has become clear that we need to take decisive action to adjust our production volumes for 2024 given a combination of supplier disruption, the weak macroeconomic environment in China and a proactive decision to strategically re-align our production plans to optimise efficiency and achieve a more balanced delivery cadence in the future.”
Lawrence Stroll, Executive Chairman Aston Martin commented: “When the Yew Tree Consortium made its significant investment in Aston Martin in 2020, we did this with a long-term view of the necessary commitment and turnaround required to unlock the enormous value potential of this iconic brand. I remain steadfast in this view and now, with the calibre and experience Adrian Hallmark brings, I am extremely confident in the Company’s ability to realise the full potential of its ultra-luxury high performance strategy.”
