Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Aston Martin is limiting imports of its luxury cars to the US and instead relying on stocks held by its US dealers to ride through Donald Trump’s trade war as the British carmaker grapples with expanding losses and debt.
The carmaker is particularly exposed to the US president’s 25 per cent tariffs on all imports of foreign-made vehicles since it does not manufacture its vehicles in America, with the market accounting for 30 per cent of its annual sales.
“We had already prepared for the worst case,” said chief executive Adrian Hallmark at a briefing on Wednesday.
“Given the scale of the tariffs on the UK car industry, getting an agreement in place for UK market makers as soon as possible is and should be a top priority for the government and the industry,” he added.
UK chancellor Rachel Reeves has opened the door to Britain cutting its tariffs on imports of US-made cars, along with agricultural and seafood products, as she tries to persuade the Trump administration to cut its 10 per cent baseline tariff on UK exports.
Aston Martin had already minimised shipments to the US in April but it will continue with the measure in May, while using up the current inventory held by its US dealers.
Hallmark said the company had enough stock to last until mid-June and would probably resume shipping to the US from late May. Before the 25 per cent tariffs came into effect in April, Aston Martin had also used production in other countries to prioritise sending vehicles to the US from late last year.
For the first quarter, the company reported adjusted loss of £64.5mn before interest and tax, compared with a loss of £57.1mn last year, while revenue fell 13 per cent from a year earlier to £234mn. Wholesale volume was flat at 950 vehicles.
Despite the weak results, Aston Martin said it would maintain its guidance to return to profitability and free cash flow positive this year.
Bernstein analyst Harry Martin said it was “impressive” that the company stuck with its financial targets, as other companies in the automotive sector such as Porsche and Volvo Cars withdraw or change their guidance.
Last month, the lossmaking group also announced plans to raise more than £125mn with the sale of its minority stake in the Formula 1 racing team and additional investment from its chair Lawrence Stroll.
Aston Martin had already indicated that it would pass on some tariff costs to customers by raising the price of its vehicles, while the company would absorb some expenses through cost-cutting.
Hallmark said on Wednesday that he would probably wait until mid to late May to make changes to the company’s pricing strategy to assess whether the US will maintain its tariffs following a recent softening of its policy to help the carmakers.
