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| Aston Martin shares shaken after profit warning | Aston Martin shares shaken after profit warning |
| (about 1 hour later) | |
| Luxury carmaker Aston Martin's share price sank more than 20% after it said profits will be lower than expected this year. | Luxury carmaker Aston Martin's share price sank more than 20% after it said profits will be lower than expected this year. |
| The company, famed for its links to fictional superspy James Bond, has been hit by supply chain issues and falling sales in China. | The company, famed for its links to fictional superspy James Bond, has been hit by supply chain issues and falling sales in China. |
| The share price of Stellantis, the owner of brands such as Peugeot, Citroen, Fiat and Jeep, also plummeted on Monday after a profit warning. | The share price of Stellantis, the owner of brands such as Peugeot, Citroen, Fiat and Jeep, also plummeted on Monday after a profit warning. |
| Carmakers across Europe have been suffering lately, with disappointing sales and increased competition from abroad taking a heavy toll on earnings. | Carmakers across Europe have been suffering lately, with disappointing sales and increased competition from abroad taking a heavy toll on earnings. |
| Aston Martin is a prestige brand which makes upmarket cars in relatively small quantities. | Aston Martin is a prestige brand which makes upmarket cars in relatively small quantities. |
| Last year, it sold 6,620 vehicles, with about a fifth of those going to the Asia-Pacific region. | Last year, it sold 6,620 vehicles, with about a fifth of those going to the Asia-Pacific region. |
| However, the company says it has been hit by a fall in demand in China, where a slowing economy has affected sales of luxury cars. | However, the company says it has been hit by a fall in demand in China, where a slowing economy has affected sales of luxury cars. |
| It has also been affected by problems at a number of suppliers, which have affected its ability to build a number of new models. | It has also been affected by problems at a number of suppliers, which have affected its ability to build a number of new models. |
| As a result, Aston says it will make about 1,000 fewer cars than originally planned this year. | As a result, Aston says it will make about 1,000 fewer cars than originally planned this year. |
| Sales, which had originally been forecast to rise, are now expected to be lower than in 2023, and earnings will fall short of current market expectations. | Sales, which had originally been forecast to rise, are now expected to be lower than in 2023, and earnings will fall short of current market expectations. |
| Adrian Hallmark, who became Aston Martin’s chief executive a few weeks ago, said it had become clear that “decisive action” was needed to adjust output. | Adrian Hallmark, who became Aston Martin’s chief executive a few weeks ago, said it had become clear that “decisive action” was needed to adjust output. |
| But he added that he was “even more convinced than before” about the brand’s potential for growth. | But he added that he was “even more convinced than before” about the brand’s potential for growth. |
| Industry giants suffering | Industry giants suffering |
| Meanwhile, Stellantis has become the latest large-scale carmaker to revise its financial forecasts, thanks to a deterioration in the industry outlook. | Meanwhile, Stellantis has become the latest large-scale carmaker to revise its financial forecasts, thanks to a deterioration in the industry outlook. |
| The company has been struggling with weak demand in the US, a key market, where it has been forced to offer discounts in order to shift unsold stock. | The company has been struggling with weak demand in the US, a key market, where it has been forced to offer discounts in order to shift unsold stock. |
| It has also been facing increased competition from Chinese brands, which have been expanding aggressively abroad. | It has also been facing increased competition from Chinese brands, which have been expanding aggressively abroad. |
| As a result, it said it expects its profit margins to be significantly lower than previously thought this year. | As a result, it said it expects its profit margins to be significantly lower than previously thought this year. |
| The announcement sent its shares tumbling. By lunchtime on Monday, the price was down more than 14%. | The announcement sent its shares tumbling. By lunchtime on Monday, the price was down more than 14%. |
| The problems at Stellantis and Aston Martin reflect a wider malaise in the European car industry. | The problems at Stellantis and Aston Martin reflect a wider malaise in the European car industry. |
| On Friday, Volkswagen issued its second profit warning in three months, while it has also suggested it might have to close plants in Germany for the first time in its history. | On Friday, Volkswagen issued its second profit warning in three months, while it has also suggested it might have to close plants in Germany for the first time in its history. |
| Its German rivals Mercedes-Benz and BMW have also downgraded their profit forecasts in recent weeks. | Its German rivals Mercedes-Benz and BMW have also downgraded their profit forecasts in recent weeks. |
| Among the common issues are falling sales in China – until recently a highly lucrative market for expensive and profitable high-end models – coupled with growing competition from Chinese brands in other markets. | Among the common issues are falling sales in China – until recently a highly lucrative market for expensive and profitable high-end models – coupled with growing competition from Chinese brands in other markets. |
| According to Matthias Schmidt of Schmidt Automotive Research, European firms have been caught out by a wave of "unsustainable" discounting by Chinese brands in their home market, which has affected sales of high-priced vehicles. | According to Matthias Schmidt of Schmidt Automotive Research, European firms have been caught out by a wave of "unsustainable" discounting by Chinese brands in their home market, which has affected sales of high-priced vehicles. |
| “German brands, and VW in particular, have been caught off-guard by the pace of change in China” he explains. | “German brands, and VW in particular, have been caught off-guard by the pace of change in China” he explains. |
| EV sales falter | EV sales falter |
| Sales of electric cars, which manufacturers have invested huge sums in developing, have been faltering badly in Europe. | Sales of electric cars, which manufacturers have invested huge sums in developing, have been faltering badly in Europe. |
| According to data from the European Automobile Manufacturers Association, sales of battery-powered cars were down nearly 44% in August compared to the same period a year ago, while their share of the market dropped to 14.4%, compared to 21% in 2023. | According to data from the European Automobile Manufacturers Association, sales of battery-powered cars were down nearly 44% in August compared to the same period a year ago, while their share of the market dropped to 14.4%, compared to 21% in 2023. |
| The decline has followed the removal or reduction of incentives for electric car buyers in a number of European markets, including France and Germany. | The decline has followed the removal or reduction of incentives for electric car buyers in a number of European markets, including France and Germany. |
| On Friday, EU nations are due to vote on plans to impose steep tariffs on imports of electric vehicles from China. | On Friday, EU nations are due to vote on plans to impose steep tariffs on imports of electric vehicles from China. |
| The measures are designed to protect local producers from unfair competition. The European Commission claims Chinese manufacturers benefit from illegal subsidies from the Chinese government – and believes tariffs will create a level playing field. | The measures are designed to protect local producers from unfair competition. The European Commission claims Chinese manufacturers benefit from illegal subsidies from the Chinese government – and believes tariffs will create a level playing field. |
| But the plan is controversial, and has received a mixed reception from manufacturers. | But the plan is controversial, and has received a mixed reception from manufacturers. |